At Window Warehouse, we understand that applying for financial help for your business can seem complicated, that’s why we have outlined the key points of the scheme and how it can help you, the business owner.
The Bounce Back Loan scheme goes live today. This government system is in place to help small and medium-sized businesses during this difficult time. This plan allows businesses to borrow microloans up to 25% of their turnover. Available borrowing starts at £2,000 and is capped at £50,000. This scheme has now gone live and for those businesses that apply, it is believed that the loans should arrive promptly.
Firstly, this scheme is available through most major UK banks, however, you will need to have a business current account with the bank that you apply through. You must be a UK resident with a business or registered charity based in the UK that was established before 1 March 2020. You must also be able to certify that your business has been adversely impacted by COVID19.
Business owners will have to self-certify that they can afford to repay the loan that they borrow as banks will not be checking this. You will not be able to seek a loan of more than 25% of your annual sales.
When it comes to repaying your business loan, you will not be required to pay anything for the first 12 months. After this, you are expected to make monthly payments over the course of the next 5 years.
Businesses will pay no interest on this loan for the first year, after this period there is a 2.5% fixed interest rate until the loan amount is repaid in full. If you are in a financial position to repay your loan amount early, you can do so with no penalty.
You will not be eligible for this scheme if you already have a Coronavirus Large Business Interruption Loan or the Bank of England’s Covid Corporate Financing Facility. Also, if you’re a bank, insurer, reinsurer, public-sector body, further-education establishment, grant-funded or state-funded school, you will not be eligible for this loan. Finally, if your business is currently subject to collections or collective insolvency proceedings, this scheme will not be available.
This scheme has been set up in order to help small businesses affected by COVID19 borrow money as quickly and simply as possible. Hopefully we have been able to help you to decide whether the Bounce Back Loan scheme is appropriate for your business.
We have linked to major UK banks below so that you can easily be directed to the appropriate pages regarding the Bounce Bank Loan scheme:
Nat West: https://www.business.natwest.com/business/support-centre/service-status/coronavirus/bounce-back-loan.html