Small businesses will benefit from new ‘bounce back’ loan scheme, with a 100% government-backed guarantee for lenders.

From 9am on Monday 4th May, the application process for small businesses to apply for these new ‘bounce back’ loans will open. The terms are as follows: 

  • Businesses can borrow up to 25% turnover or £50,000 (minimum of £2,000)
  • Access to this cash within days of successful application 
  • 100% government backed so no risk to the lender 
  • Interest free for 12 months 
  • Simple online application 
  • Cannot apply if you’ve already been paid out for a Coronavirus Business Interruption Loan Scheme (CBILS) loan 
  • Not open to organisations that are primarily funded by government and a few others (e.g. education, insurers, banks etc.), but insurance brokers can apply

The introduction of these loans is in a bid to continue to stand behind their promise of trying to help protect as many jobs and businesses as they can through this crisis. This comes after there has been such a small uptake of CBILS with only 16,000 loans processed so far. This is significantly behind other countries. More needs to be done to support the UK economy from complete free-fall. 

This application will be designed to be a short, online only application to ensure fast processing and a speedy access of cash for businesses. It won’t need detailed evidence, such as proof of viability, forward forecasting or affordability, which are just some of the criteria for CBILS, but it could ask for latest financial accounts which they’d expect you to have easy access to.

For full details of CBILS requirements, see our earlier article here. 

It is important that you consider if this is all that you would require to get you through. If not, then I’d recommend undertaking a full analysis of cashflow needed prior to application as it is likely to mean you wouldn’t be successful for other lending at a later date.

Talk to your Principal Adviser at A4G or call us on 01474 853 856 to make sure applying for bounce back lending is the right path for your long term plans.

We will update you further when more information comes to light about the application process. 

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Emma White



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