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Bounce Back Loan Deadline for Applications

25 September 2020, Advocates, Companies, Creative Industries, Employer, Sole Traders

When is the Bounce Back Loan Deadline?

The Bounce Bank Loan deadline for applications was originally scheduled for 4th November 2020.  On 24th September Rishi Sunak announced that the deadline for applications would be extended to 30th November 2020.  The Bounce Back Loan Scheme (BBLS) will help eligible small and medium-sized businesses affected by the coronavirus situation to borrow between £2,000 and £50,000.

The Government covers the first 12 months of interest (this means you pay 0% for the first year).  Further information can be found on the government website.

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How do I apply?

The best way to apply is from your online banking access from your existing business bank account.

The Lloyds Bank application form for the scheme is here.

Can I get more than one loan?

You cannot increase a loan after being approved, or apply for more than one Bounce Back Loan for the same business.

How long will the scheme run for?

The Bounce Bank Loan deadline for applications is 30th November 2020.

How much will I pay for this loan?

For the first year the government will pay the interest on your behalf, and we won’t ask you for any repayments.

After year one, your bank will charge a fixed interest rate of 2.5%, which has been set by the government, and a monthly repayment charge that will be shown in the loan agreement your bank sends you.

When will the money from the loan be in my account?

For successful applications banks aim to have the funds in your account within days of completing the online application.  In our experience the funds have normally appeared within hours.

Will I be liable for the debt?

Yes, whilst the government will be providing 100% guarantee to the Bank, customers are still liable for this debt and should ensure they are able to pay back the loan amount requested.

Will I have to provide a Personal Guarantee or my home as security?

No personal guarantees or security will be required.

When will have to repay the loan?

Following an announcement from Rishi Sunak on 24th September, the maximum term of the loan was extended to 10 years.

  • loans can now be extended from six to ten years – nearly halving the average monthly repayment
  • businesses who are struggling can now choose to make interest-only payments
  • and, anyone in real trouble can apply to suspend repayments altogether for up to six months

Can I repay the Bounce Back Loan early?

You can repay the loan in full at any time without any early repayment fees.  Banks will impose a minimum payment amount if you want to repay part of the loan early.  For example you won’t be able to repay £50 here and £10 there.  Your extra payments may need to be at least £2,000.

Can I apply if I don’t have a Business Current Account?

Each bank is managing the loan application through their own systems.  You are typically required to have a business account to apply for the loan.

Am I covered by consumer protections?

The Bounce Back Loan Scheme is not subject to the usual consumer protections that apply to business lending, and as such will not have the benefit of the protection and remedies that would otherwise be available under the Financial Services and Markets Act 2000 or the Consumer Credit Act 1974.

You should not apply for an amount that you cannot comfortably afford to repay now and in the future to avoid the possibility of legal action.

What about State Aid Rules?

Some activities/sectors are excluded, including the state funded education sector, insurance providers (other than insurance brokers), and deposit taking banks.  You must also confirm during the application, that if your business was considered in difficulty on 31/12/19, that it is not in breach of de minimis State aid restrictions.

The government support in the form of interest payments on the first 12 months of the loan is state aid.  Interest paid on your behalf must therefore be included in the any state aid reporting.  This interest grant from the government must be reported to HMRC in your monthly payroll reporting (EPS).

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