It was announced by the Chancellor recently that a new loan scheme for small and medium businesses was to be introduced to support cashflow for these entities, which as you will guys will fully appreciate are a fundamental part of our economy. Launching tomorrow (4/5/2020) is the Bounce Back Loan Scheme (BBLS). https://www.gov.uk/government/news/small-businesses-boosted-by-bounce-back-loans
The CBILS applications have been somewhat complicated and inefficient in turnaround time. Considering the risk exposure for the banks, with 80% of the CBILs loan being guaranteed by the Government, it should have encouraged a swift application process. However, this hasn’t been the case, with some banks taking weeks to release the funds and then newcomers promising better things but not delivering at all. So all in all it’s not been as easy to access money as the Government initially explained.
However, the BBLS is going to be a much simpler application process. There will be a few simple steps to go through and then you will get a decision, with funds landing in quick succession. First port of call is to approach your bank to complete the process online.
One of the criteria points states that your business will have needed to be financially stable at 31/12/19. So if you have no management figures up to that date you may need to draft something up unless the bank will allow you to self-certify.
The BBLS will be 100% guaranteed by the Government. The rate of interest will be low too. No interest for 12 months and from what I have read no capital repayments for 12 months.
The loan is capped up to £50K. If you have been accepted for a CBILS loan then you can flip this over to the BBLS if its below the £50K.
All of this sounds great and will be a big support for businesses. With my cynical head on it could be abused as its all seems too simple but hey ho!
The loan will still need to be paid back so it’s really important and as I have mentioned before please do your cashflow forecasts to keep up to date with your money in and out, especially if you have done tax and VAT deferrals. These will hit you hard if you forget about these later down the line!
I will be liaising with our partnering broker Central Business Finance tomorrow to find out more from the lenders perspective and what further guidance becomes available.
As always if anyone has any questions please drop me a line.
All the best!
P.s. If you think I can help you during these trouble times, please get in touch.