Bounce back loans

At Partner Accountancy, we’re dedicated to staying abreast of COVID-19 UK Government financial updates, developing policies and guidelines. We’re here to help you make sense of these new developments, with support as you navigate new waters. Whether you’re an employee, director, share-holder or business owner, you can contact us to figure out what’s best for your situation – we’re here for you!

Information correct as at 8 May 2020

Bounce back loans new this week – to help small businesses not receiving support elsewhere, such as limited company directors

You can borrow between £2,000 and £50,000
Capped at 25% of turnover
Interest free for first 12 months (2.5% fixed p/a thereafter)
No repayments due for the first 12 months
Initial term is 6 years and you can repay early without penalty
Unsecured, 100% government backed guarantee
Business must have been established before 1 March 2020 and currently be trading
Credit rating won’t affect ability to get the loan
Only open to businesses who haven’t already applied for other covid-19 loans
Apply via your bank (if they are one of the approved lenders)
Funding aim to be available the next day

What can the loan be used for?

There are no rules on what you can and can’t use the money for, presumably the Government have designed these loans to support the income of those businesses suffering right now, however, although helpful this could prove to be a double edged sword – as the loan needs to be paid back, which will ultimately become a further burden on the business in the future.

Hopefully like us you don’t actually need the loan, but provided you can use it to generate income of more than 0%, then you will be making a profit.

If you operate a limited company

If you operate a limited company bear in mind that if you draw this money personally, you will need to pay tax on it, and if this is in addition to your usual income, you could end up paying a significant proportion of this tax at higher rates.

Where to apply

Assuming your bank is one of those listed below, you can apply directly with them, otherwise, you will need to make an application with Barclays, HSBC or TSB – as they are the only banks accepting applications from new customers.

Banks offering bounce back loans:

Bank of Scotland
Barclays
Clydesdale Bank
Danske Bank
HSBC
Lloyds Bank
NatWest
RBS
Santander
Starling bank (applications from 11 May 2020)
The Co-Operative Bank
TSB
Ulster Bank
Yorkshire Bank