Skip links

New Bounce Back Loan announced for small businesses

The Coronavirus Business Interruption Loan Scheme (CBILS) has received a lot of criticism due to the to strict rules over eligibility and only 80% of the loans being government backed rather than 100% as is the case in many other countries where similar support packages were given.
The chancellor promised at the time of the launch to do “whatever it takes” to keep companies, especially small ones, afloat as he sought to reassure company directors facing months of zero revenue.
The government has now announced a new scheme called “The bounce back loans scheme”, which is a 100% government backed loan scheme for small businesses, designed to offer up to £50,000 of fast-track finance for those affected by coronavirus.
It will enable businesses to access the cash within days, and in some cases within 24 hours. Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple two-page standardised application form. There are no forward-looking business viability tests or eligibility criteria for the finance.
The Chancellor of the Exchequer commented: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis. This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
The scheme will open for applications on Monday 4th of May. Companies will be able to access these loans through a network of accredited lenders.

You are eligible if your business:

  • Is based in the UK
  • Has been negatively affected by coronavirus
  • Was not an “undertaking in difficulty” on 31 December 2019

“Undertaking in difficulty” is defined in Article 2 (18) of the Commission Regulation (EU) no. 651/2014 of 17 June 2014 as follows:
In the case of a limited liability company, where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital.

Get in touch if you are unsure whether you are eligible or need assistance with your application.