Business Bounce Back Loans – A definitive Guide

Business Bounce Back Loans – A definitive Guide

In the ever-evolving world of business financing, one term that has gained significant attention is “Bounce Back Loans.” These loans have provided a lifeline to many businesses, offering a streamlined process and favourable terms during challenging times. In this comprehensive guide, our expert accountants in Leeds delve into the specifics of Bounce Back Loans, shedding light on what they are, their features, and the lending criteria associated with them.

What is a Bounce Back Loan?

Bounce Back Loans, introduced in response to economic uncertainties, are a financial lifeline for small and medium-sized businesses. Here’s a breakdown of their key features:

  • Loan Amount: These loans are available in amounts ranging from £2,000 up to the lower of 25% of your turnover or £50,000.

  • Exclusively for Loans: Bounce Back Loans are designed exclusively for loans, making them a distinct financing option under the Coronavirus Business Interruption Loan Scheme (CBILS).

  • Application Period: They were available from 04-05-2020 until 04-11-2020, providing a window of opportunity for businesses in need.

  • Government Guarantee: Bounce Back Loans are 100% guaranteed by the Government, which significantly reduces the risk for lenders.

  • Low Interest Rate: Due to the government’s guarantee, the interest rate is fixed at just 2.5%, making it an attractive borrowing option.

  • No Fees: These loans come with no arrangement fees, easing the financial burden on borrowers.

  • Deferred Repayments: Borrowers enjoy the benefit of no capital repayments for the first 12 months, allowing for financial breathing space.

  • Interest-Free Grace Period: The first 12 months of these loans are interest-free, providing even more financial relief.

  • Flexible Repayment Terms: Bounce Back Loans offer repayment terms of up to six years, giving borrowers the flexibility they need.

  • Accredited Lenders: These loans are available through accredited lenders approved by the British Business Bank.

  • Exemption for CBILS Recipients: If you’ve received a Coronavirus Business Interruption Loan (CBIL), you are not eligible for a Bounce Back Loan.

  • Upgrade and Swap Options: It’s possible to upgrade your loan to a CBILS if your initial borrowing is insufficient. You can also swap a CBIL of less than £50,001 for a Bounce Back Loan.

Lending Criteria for Bounce Back Loans

To qualify for a Bounce Back Loan, businesses need to meet specific criteria, including:

  • Being an established UK business as of 01-03-2020, with at least 50% of income generated from trading.

  • Self-certifying that the business was not a “Business in Difficulty” as of 31-12-2019.

  • Providing the necessary information for Know Your Client and Anti-Money Laundering checks.

This straightforward process makes obtaining a Bounce Back Loan more accessible compared to other financial options.

Where to Apply For A Bounce Back Loan?

Bounce Back Loans are available through on-line applications directly with providers. There are currently ten accredited lenders and partners listed by the British Business Bank, and this list continues to grow, ensuring more options for businesses seeking financial support.

Bounce Back Loans have been a beacon of hope for businesses facing financial challenges. With favourable terms, a simple application process, and government backing, they provide a lifeline to SMEs during uncertain times. Understanding the features and lending criteria of Bounce Back Loans is essential for businesses seeking financial stability and growth. Don’t miss out on this opportunity to bounce back from adversity and secure the financial support your business needs.

There are currently 10 providers (though growing each day) on the British Business Bank’s approved list – Bounce Back Loan Scheme (BBLS) – Current Accredited Lenders and Partners. Via on-line applications direct with providers. 


Bounce Back Loans: Your Guide to Repayment and More

Bounce Back Loans were a lifeline for many businesses during challenging times, offering a 2.5% fixed interest rate, flexible repayment terms, and a government guarantee. Now, as repayment starts for many borrowers, understanding the specifics is crucial. Let’s delve deeper into Bounce Back Loans, focusing on repayment and key features:

Bounce Back Loan Repayment

  • Repayment starts 12 months after receiving the loan. This grace period provides breathing room for your business to recover.
  • Monthly repayments are fixed, combining capital and interest over the remaining 6-year term.
  • Early repayment is possible without penalty, allowing you to pay off the loan faster if your finances improve.
  • The Pay As You Grow (PAYG) scheme offers flexible options:
    • Extend the loan term to 10 years to reduce monthly payments.
    • Reduce repayments for 6 months by paying only interest.
    • Take a repayment holiday for 6 months, but interest accrues during this period.

Remember: It’s essential to understand your repayment obligations and choose the PAYG option that best suits your business needs. Consult with your lender or a financial advisor for personalised guidance.

Bounce Back Loan Features

  • Loan amounts: £2,000 to 25% of your turnover, capped at £50,000.
  • Fixed interest rate: 2.5%, significantly lower than typical business loans.
  • No arrangement fees: Save money on upfront costs.
  • 100% government guarantee: Reduces risk for lenders and makes securing the loan easier.
  • Simple application process: Faster access to funds compared to traditional loan options.

Bounce Back Loans are no longer available for new applications. However, if you already have one, understanding the repayment options and key features is crucial for informed financial management. Ascentis Accountants can help you navigate Bounce Back Loan repayment, offering expert advice and support.

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