Bounce Bank Loans and Why to Apply!
Launched on Monday 4th May, thousands of small firms and sole traders including high street retailers, are now eligible for government Bounce Back Loans (BBL) in order to help them make it through the coronavirus outbreak.
Businesses are able to borrow between £2,000 and £50,000 by applying via a short and simple online form, with the cash arriving within days.
As well as the loans being 100% government backed for lenders, they have also confirmed that the first year will be completely interest free, followed by an affordable flat rate of just 2.5% for the following 5 years.
Any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less, can apply to have it transferred to this generous new scheme until 4th November 2020.
The first port of call should be your own Business bank. However, if yours isn’t currently offering the loan programme you can apply through others, there are now 10 banks already doing the loan with others looking to follow suit within the next few days.
Who is Eligible?
You can apply for a loan if your business:
- Is based in the UK
- Has been negatively affected by coronavirus
Why Should I Apply?
These are difficult times for businesses dealing with the immediate impact of Covid-19, along with the uncertainty of how it will continue to affect business long into the future.
You may be worried about taking on debt in these uncertain times, but businesses haven’t seen such low rate easy borrowing like this for a long time. Think about where you’d like your business to be in 12 months. Taking out a Bounce Back Loan could provide you with some welcome opportunities:
1. Why not give your business a cash flow boost by using it as an emergency interest free overdraft? Your business may not need to use it - it can be paid back at any time without penalties - but it may well take the pressure off financially and help with those sleepless nights!
2. Use it to keep afloat of fixed business costs during these uncertain times like insurance, licenses, memberships etc, all of which are essential to your business. It could be the difference between surviving and folding!
3. Perhaps you could make changes or updates to your business to ensure you’re able to function and continue to offer your products and services in this changing environment? You may only be able to apply for £2,000, but maybe this could be just enough to futureproof your business by growing a greater online presence.
4. Don’t forget to pay yourself!! You are the most important part of your business and if you cannot pay yourself, your business will not survive! Use it to cover your personal costs as a business owner, enabling you to focus on developing the business and its services throughout these fast-changing times and into a sustainable future.
Is it easy to Apply?
As a SME we went through the application process and it is really simple. It takes a maximum of 10 minutes (not including time phoning the bank, however most application processes are online).
To apply, you will need:
- Company Address and contact details
- Company Number if applicable
- Estimated Turnover for 12 months from January 2019 (Estimates if trading commenced after then)
- How much you want to apply (Maximum of 25% of estimated turnover)
- Bank Account details
The money should then be in your account within 24/48hrs of completed application.
Where do I apply?
More information and the link to apply can be found here: https://www.gov.uk/government/news/new-bounce-back-loans-to-launch-today
We’re here to help!
Please feel free to contact us if you require any assistance with your business - we are here to help!