The Bounce Back Loan Scheme was announced by the Chancellor on 27 April after some pressure from small businesses who were unable to access the Coronavirus Business Interruption Loan scheme (CBILS), backed by small business organisations like the FSB. The new scheme aims to make it quicker and easier for small businesses to access cash. The terms of the loans are:

  • businesses will be able to borrow between £2,000 and £50,000
  • there is a 100% government-backed guarantee for lenders rather than the 80% with the CBILS
  • The loans will be easy to apply for through a short, standardised online application.
  • The loan should reach businesses within days – providing immediate support to those that need it as easily as possible.
  • The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.
  • Loans will be interest free for the first 12 months and the government will pay any fees and interest for the first 12 months.
  • No repayments will be due during the first 12 months

This addresses some of the issues holding up loan finance being released by the banks, one of the major ones being the Financial Conduct Authority (FCA) rules which banks are obliged to operate under and which the new schemes did not previously account for. The rules for the CBILS have also been changed to make it easier for businesses to access funds. The Bounce Back Loan Scheme has been welcomed by organisations representing business including the FSB, Confederation of British Industry (CBI), Institute of Directors (IoD) and British Chambers of Commerce (BCC).

Considering the speed with which we went into lockdown it is little surprise that there have not been teething problems, but already the first payments under the job retention scheme for furloughed staff have been made. This is probably the last of the big government schemes and the Bounce Back Loan Scheme should hopefully help some of those businesses who previously fell through the cracks.  You should seek professional advice before taking any steps based on these contents. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend, Kent – Accountants who “speak your language”