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
- Clydesdale Bank
- Danske Bank
- Lloyds Bank
- Starling bank (applications from 11 May 2020)
- The Co-Operative Bank
- Ulster Bank
- Yorkshire Bank
Read more on Covid-19 support