Should I pay someone to help me apply for a Bounce Back Loan?
No, no, no and no.
To repeat this part of the show in case you missed it.... NO!
There are plenty of people out there that are offering to help businesses submit applications to the Bounce Back Loan Scheme (BBLS) for a fee - some even excitedly claiming that they will only charge the fee if an application is successful.
If you meet the criteria, the application will be successful.
You do not need to pay anyone to help you - it is a complete cake walk to apply for the BBLS in Kent.
You may need to pay someone to help you if you are applying to the Coronavirus Business Interruption Loan Scheme (CBILS), but that is a different beast.
Bounce Back Loan applications take minutes. They are completed online. And you can apply again if you are rejected.
Extended - borrow more and borrow again.
The Bounce Back Loan Scheme (BBLS) was one of a number of initiatives that the UK Government announced back in May to help small businesses deal with the COVID situation.
Have a look at our previous blog, 'Bounce Back Loans (BBLS)' to get an overview of the main points of the scheme.
With the country back in lockdown the scheme has been extended. This means:
- If you have a BBLS in place but did not borrow up to the limits (25% of turnover to a maximum of £50,000) you can now borrow more (up to those limits)
- If you have not applied for the scheme you now have until 31 January 2021 to apply.
The scheme is available through what is referred to as 'accredited lenders' - banks to you and us! (Click on the link for the list.)
You should speak to your bank even if they are listed since some such as TIDE, are no longer able to offer the scheme due to funding restrictions.
Also, if you already have a loan, not all lenders have yet decided how you go about increasing/extending it.
How it works:
- No security of personal guarantee
- Government provides a 100% guarantee for the loan (note: this protects the bank not the borrower)
- Pay the loan off over up to 6 years
- No repayments in the first 12 months
- Interest rate is 2.5% per annum
- Interest for the first 12 months is paid by the UK Government
- No additional fees - arrangement or early repayment fee.
What if my bank is not listed/can't offer BBLS?
Not generally a problem.
You will be able to approach any bank that is able to offer the scheme and apply. This will involve setting up a 'feeder account' which is a temporary account used to 'feed' the loan funds into your main business bank account.
This does take time though. In addition many mainstream banks have stopped opening new business accounts as they can't cope with the volumes. You'll need to do some digging to find where you can apply.
Is it only loans or are other options available?
It is only term loans.
Products such as overdrafts and factoring/invoice discounting are not available under BBLS.
If you need other support, or if you need to borrow more than £50,000 you will need to apply for the Coronavirus Business Interruption Loan Scheme (CBILS) - have a look at our blog, 'Coronavirus Business Interruption Loan Scheme (CBILS)'.