On 27th April the Chancellor announced further financial support during the COVID-19 pandemic in the form of a ‘Bounce Back’ Loan to support small businesses.
The ‘fast-tracked’ loan scheme will help small and medium sized businesses financially impacted by coronavirus to apply for loans of between £2,000 up to £50,000. In a marked difference from the CBILS criteria, the government have indicated that Bounce Back loans will be 100% government guaranteed, and the loan will be interest and fee-free for the first 12 months. No repayments will be due within the first 12 months of the loan period, with the government intending to agree a low interest rate with lenders for the remaining period of the loan, which can be spread over a maximum period of six years.
It is important to note that if you have already claimed funding under the Coronavirus Business Interruption Loan Scheme, you cannot also apply for support under the Bounce Back scheme. However those businesses who have already applied for and received a loan of up to £50,000 under CBILS can apply to have their loan product switched to the Bounce Back Loan Scheme, and can do so up until 4 November 2020.
Who will be offering the Bounce Back loan?
You can view a full list of accredited lenders participating in the scheme on the British Business Bank.
Who can apply for the Bounce Back loan?
UK based businesses, who have been negatively impacted by coronavirus and who was not an ‘undertaking in difficulty’ on 31 December 2019.
Who cannot apply for the Bounce Back loan?
- Banks, insurers and reinsurers (excluding insurance brokers)
- Public sector bodies
- Grant funded further education establishments
- State funded primary and secondary schools
How and when to apply?
The scheme went live on 4 May 2020. Applications should be made directly via lenders.
- The Government have launched a new business support finder tool for businesses and the self employed to quickly assess what financial support is available to them (this is yet to be updated with details of the Bounce Back Loan Scheme above).
- The government are also proposing to introduce temporary new measures to safeguard the UK high street through the temporary ban of statutory demands (made between 1 March 2020 and 30 June 2020) and winding up petitions (presented from 27 April through to 30 June) where the company’s inability to pay is the result of COVID-19. This is a complex area and you should contact us for further advice if you are affected. You can read more here.
- The CJRS portal has been up and running for a week now, and employers are due to receive furlough funds from today. The government have also issued further guidance about how to claim for 100 or more furloughed employees and the type of bank account details you must use.
- We have also issued guidance as to how Mitchell Charlesworth will be conducting our audit processes during COVID-19
We hope you are keeping well and would urge you to contact your usual engagement partner or a member of the team should you require any support at all throughout this unsettling time.