Small business owners can now apply to accredited lenders by filling out a simple online form, with only seven questions. There is no longer a need to provide a business plan or projections.

This scheme will help businesses and sole traders affected by coronavirus (COVID-19) to apply for loans of up to £50,000.

The latest details published by the Government are available here:

www.gov.uk/government/news/new-bounce-back-loans-to-launch-today

 

  1. What is The Bounce Back Loan?
  • The Bounce Back Loan scheme is intended to assist small and medium-sized businesses to borrow between £2,000 and £50,000;
  • The government will guarantee 100% of the loan;
  • The amount of the loan you can apply for is capped at 25% of your total turnover, although we are still awaiting a definition of how you prove turnover (previous schemes have relied upon latest statutory accounts).

 

  1. What Are The Terms Of The Bounce Back Loan?
  • There will not be any fees or interest to pay for the first 12 months.
  • Thereafter an affordable flat rate of 2.5% interest will be charged on these loans.
  • Loan terms will be up to 6 years.
  • No repayments will be due during the first 12 months.

 

  1. Eligibility
  • Thousands of small firms and sole traders – including high street staples like hairdressers, coffee shops and florists – are eligible for the Scheme;
  • You must be able to demonstrate the impact of COVID-19 upon your business;
  • Your business must have been established before 1 March 2020;
  • Your business must also have been trading as a going concern;
  • Any business that has already taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this new scheme.

 

  1. How to Access the Scheme
  • Small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.

 

  1. What Should I Consider Before Making An Application
  • Fundamentally, this is a loan and requires repayment, you should consider carefully how much you think you need, ideally preparing a simple forecast to support your assessment, and ensure you have claimed all other reliefs and grants available to you.
  • You may feel that you need this loan to keep your business going especially where you are either

Barrons has put together a helpful guide to running your business during the coronavirus crisis.