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Bounce Back Loans

In order to help self-employed and small businesses, the Chancellor Rishi Sunak has announced the Bounce back Loan scheme in conjuction with major high street lenders. The scheme is pretty sytraightforward and is a great deal for people who need a loan in these difficult times. Howeber it is important to remember that, although the rates of interest are very low, this is not a grant! You will need to pay back the full amount.

As with any loan we recommend that you do not take out a bounce back loan unless you are sure that you will be able to pay it back. You need to consider this as an essential loan to keep your business going (as well as paying your income).

Beware the temptation to use the bounce back loan money for non-essentials. For most people this is very unwise.

Everything you need to know about bounce back loans:

You can borrow between £2,000 and £50,000 up to a maximum 25% of your total turnover This is usually calculated for calendar year 2019 but new businesses can estimate their turnover.
No interest will be charged and no repayments will need to be made in the first 12 months.
After 12 months, all banks will charge a fixed 2.5% annual interest.
You can repay the loan early without penalty. Part repayment may also be possible.
The loans will last for six years - 1 year interest-free and the rest at 2.5%. However, as you can repay at any time that gives you flexibility, of course, the sooner you repay once interest is charged, the smaller the overall cost.
The loans are unsecured.
Your business must have been established before 1 March 2020. It must also still be trading as a going concern (temporary closure due to coronavirus is ok)
Credit ratings (business or personal) won't impact your eligibility nor will the profitability of your business.
The loan will likely go on your business credit report, but not on your personal one
At least eight banks are offering them.

You need a business for a bounce back loan but don't have to have a business bank account. It is at the discretion of the individual banks.

Bounce back loans do not affect your eligibility for other Government personal support. You can still apply for a bounce back loan and get the self-employment income support grants, and you may still be eligible for universal credit.

Bounce Back Loan providers