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Along with other measures like the Self-Employment Income Support Scheme (SEISS), the Bounce Back Loan Scheme was intended to help businesses and the self-employed through the pandemic. Small and medium-sized businesses can apply for a loan through the Bounce Back Loan Scheme, and there are no fees or interest to pay on the loans for the first 12 months. Following 12 months, the interest rate on Bounce Back Loans will be 2.5 percent a year.
Through the scheme, businesses can borrow up to 25 percent of their turnover, or a maximum of £50,000.
The minimum amount that can be borrowed under the scheme is £2,000.
Businesses requiring a larger loan may be able to secure this through other Government financial initiatives, such as the Coronavirus Business Interruption Loan Scheme.
In light of the ongoing lockdown, changes have been made to the Bounce Back Loan Scheme to offer further support to claimants.
Chancellor Rishi Sunak explained the Government’s financial support has been extended to deal with the “economic effects” of the virus.
Mr Sunak said: “I’ve always said I would do whatever it takes to protect jobs and livelihoods across the UK – and that has meant adapting our support as the path of the virus has changed.
“It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support.
“Extending furlough and increasing our support for the self-employed will protect millions of jobs and give people and businesses the certainty they need over what will be a difficult winter.”
How will the Bounce Back Loan Scheme change?
Businesses which previously did not claim the full 25 percent of their turnover, or maximum of £50,000, can now top-up their Bounce Back Loan.
Sherad Dewedi, Managing Partner at Shenward Chartered Accountants and Business Advisors, told Express.co.uk: “The UK Government has announced a change to the Bounce Back Loan Scheme allowing customers with an existing Bounce Back Loan to apply for a top-up if they did not take the maximum amount available to them when they applied for their existing Bounce Back Loan.
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“Businesses must not have currently borrowed the maximum of the 25 percent of annual turnover allowed and must be able to certify that the COVID-19 pandemic has affected their income.
“Also, there’s the Pay As you Grow Scheme which was announced – enabling the repayment to be over 10 years rather than the initial six years.
“In addition, you can move to interest-only or suspend payments for up to six months, which will be beneficial to some.”
The deadline to top-up a Bounce Back Loan is now January 31, 2021, and top-ups on Bounce Back Loans should be arranged with the lender.
When is the deadline to apply for a Bounce Back Loan?
To apply for a Bounce Back Loan for the first time, the deadline has now been extended to January 31, 2021.
The Government website provides further details about the 28 lenders taking part in the Bounce Back Loan Scheme HERE.
You can apply for a Bounce Back Loan if your business is based in the UK, and was established before March 1, 2020.
Your business must also have been adversely impacted by coronavirus to apply.
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