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Home > News > Update – the Coronavirus Bounce Back Loan scheme

Update – the Coronavirus Bounce Back Loan scheme

09 May 2020 | Paul Hardman

On 4 May 2020 the UK Government announced the launch of the Coronavirus Bounce Back Loan scheme (BBLS) having provided initial details on 27 April 2020 (see our article here). Under the BBLS eligible businesses negatively affected by the ongoing Coronavirus pandemic can borrow between £2,000 and £50,000 from a list of lenders accredited by the British Business Bank.

The UK Government has now modified the BBLS and has published updated guidance.

Modification of the Bounce Back Loan scheme

The BBLS has been modified so that:

  • The interest rate to be charged on the loan amount after the initial 12-month interest free period is 2.5%. Lenders are not permitted to charge any fees on top of this interest rate.
  • The original eligibility requirement that your business must be an ‘undertaking in difficulty’ as at 31 December 2019 has been removed. However, if your business was an ‘undertaking in difficulty’ as at 31 December 2019, it must confirm it complies with additional state aid restrictions.

Taking into account the updates, at time of writing your business will be eligible to apply for the BBLS if it:

  • is based in the UK;
  • was established before 01 March 2020; and
  • has been adversely impacted by the Coronavirus

Applying for the Bounce Back Loan scheme

Applications are made online to one of the accredited lenders. A list of these lenders is available from the British Business Bank. You will need to complete a short application form on behalf of your business and certify that it meets the BBLS eligibility criteria. Applications will be subject to fraud, anti-money laundering and know your customer checks.

The chosen lender will consider your application and inform you whether or not it accepts your application. The British Business Bank is expecting lenders to process applications and inform applicants within days of receipt as the BBLS has been specifically designed to enable quick access to funds by eligible businesses.

If the lender rejects your application, your business can apply to any of the other accredited lenders.

Our Corporate and Commercial law teams in Bristol and London specialise in advising SMEs. If you are looking for legal guidance on the Coronavirus Bounce Back Loan scheme please contact:

Paul Hardman – 0117 906 9425 – paul.hardman@gregglatchams.com

Bridget Juckes – 0117 906 9260 – bridget.juckes@gregglatchams.com

Karen Davies – 0117 906 9238 – karen.davies@gregglatchams.com 

 

This guidance is correct as of 09 May 2020.

Please note that in relation to the UK Government’s response to the Coronavirus pandemic our advice is based on the UK Government’s announcements about changes it intends to make to the law.  The situation regarding the pandemic and the UK Government’s response to it is changing fast and in consequence the content of any new or changed law may differ from that anticipated. 

 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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