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Existing Bounce Back Loans can be topped up to £50,000

9 November 2020

The Bounce Back Loan Scheme (BBLS) enables smaller businesses to access finance more quickly during the coronavirus outbreak.

The scheme helps small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover. The maximum loan available is £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5% a year. The scheme has been extended and is now open to applications until 31 January 2021.

If you already have a Bounce Back Loan but borrowed less than you were entitled to, from 10 November you can top up your existing loan to your maximum amount. You must request the top-up by 31 January 2021.

Eligibility
You can apply for a loan if your business:

  • is based in the UK
  • was established before 1 March 2020
  • has been adversely impacted by the coronavirus
  • If your business was classed as a business in difficulty on 31 December 2019 you’ll need to confirm that you’re complying with additional state aid restrictions.

Who cannot apply
Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools
  • If you’re already claiming funding

You cannot apply if you’re already claiming under:

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • COVID-19 Corporate Financing Facility

If you’ve already received a loan of up to £50,000 under one of these schemes you can transfer it into the Bounce Back Loan scheme. You have until 31 January 2021 to arrange this with your lender.

How long the loan is for
The length of the loan is 6 years, but you can repay early without paying a fee. No repayments will be due during the first 12 months.

Before your first repayment is due, your lender will contact you about further options to:

  • extend the term of your loan to 10 years
  • move to interest-only repayments for a period of 6 months (you can use this option up to 3 times)
  • pause your repayments for a period of 6 months if you have already made at least 6 repayments (you can use this option once)

How to apply
There are 28 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website. The lender will ask you to fill in a short online application form and self-declare that you are eligible.

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.