The government’s Bounce Back loan scheme launched yesterday
The government’s Bounce Back loan scheme launched yesterday (4th May) and, perhaps unsurprisingly, saw lenders inundated with applications.
Bounce Back loans were first announced last week (see our post) with the aim to provide much needed funding to viable smaller businesses who have not been able to benefit from the Coronavirus Business Interruption Loan Scheme (CBILS). Under the new scheme, loans of between £2,000 and £50,000 (capped at 25% of a business’ turnover) will be made available, 100% guaranteed by the government.
Bounce back loan interest rate
The loans will attract an interest rate of 2.5% and, like the CBILS loans, will not require borrowers to pay any interest or capital repayments for 12 months. However, unlike the CBILS, these loans are designed to be quick and easy to access – via an online application consisting of only 7 questions.
Applying for the Bounce Back Loan scheme
The rush to apply for the loans resulted in some quite staggering numbers coming out of banks, including 12,830 applications being received by HSBC alone in the first 3 hours from launch. Barclays reported 200 applications in the first minute and, encouragingly, were quick to point out that these have all already been approved.
Following the negative stories surrounding the availability of support for small businesses this comes as welcome news.