On 27 April 2020, Chancellor of the Excheuqer Rishi Sunak acknowledged that many smaller businesses were struggling to obtain finance under the previously announced
Coronavirus Business Interruption Loan Scheme (CBILS).
In light of this, a new
Bounce Back Loan Scheme was announced which will be 100% guaranteed by the government (as opposed to 80% guaranteed under the CBILS). The Bounce Back Loan Scheme will launch on 4 May 2020 and will allow small and medium-sized businesses (SMEs) to borrow between £2,000 and £50,000. It has been confirmed that loan terms will be up to 6 years and there won't be any fees, interest, or repayments to pay for the first 12 months.
Eligibility
You can apply for a loan if your business:
- is based in the UK;
- has been negatively affected by the coronavirus pandemic; and
- was not an 'undertaking in difficulty' on 31 December 2019.
Certain businesses are not eligible for the loan, namely banks, insurers & reinsurers, public-sector bodies, further-education establishments (if they are grant funded), and state-funded primary and secondary schools.
You cannot apply for the Bounce Back loan if you have already made a claim under the CBILS. However, if you have received a loan under the CBILS of up to £50,000 you can arrange for this to be transferred into the Bounce Back Loan scheme until 4 November 2020.
Further details regarding the scheme are yet to be released, however PD Tax are following this loan scheme closely and will provide an update once more information is made available.
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