Bounce Loan Top Up Guide – What You Need To Know
As the UK moves towards its second confinement, business owners have had access to additional cash to improve their finances over the coming months.
The Treasury, which has extended its emergency business lending program, will allow businesses to ask for more cash to ‘top up’ their loans in a bid to help more businesses survive the economic impact of the pandemic of coronavirus.
It comes after people wonder when will nail bars reopen in the UK?
Here’s what you need to know …
What are bounce loans?
Small businesses can apply for a loan of up to £ 50,000 with no interest charges or repayment required in the first 12 months. After 12 months, all banks will charge a fixed annual interest of 2.5% but it is much cheaper than a personal loan. The loans were originally supposed to last six years, but this term was extended to 10 years.
Your business must have been established before March 1, 2020 and must still be in business at the time of application (temporary cessation due to coronavirus does not matter) – and the reason for any issues must be due to coronavirus .
A two month extension was granted for the application process.
UK businesses have until January 31, 2021 to apply for emergency business loans, including Bounce Loans (BBLS) for Coronavirus Rebound Interrupt Loans (CBILS) and CLBILS for Large Businesses.
Rishi Sunak confirmed on Twitter: “To help more businesses access additional support, the application deadlines for our government-backed loan program and the Future Fund have been extended until January 31, 2021.”
To help more businesses access additional support, the application deadlines for our government-backed loan programs and the Future Fund have been extended until January 31, 2021. pic.twitter.com/UhrZZtQKxQNovember 2, 2020
Small businesses that have previously accessed liquidity through the government-backed BBLS program, offering loans of £ 2,000 to £ 50,000 (capped at 25% of annual turnover), will still be able to apply to borrow money. extra money. So if they didn’t withdraw the full amount the first time, they can top up by asking for extra money this time around.
So far, 1.3 million businesses have benefited from £ 40.2 billion.
A government document outlining the changes said: “We understand that some companies did not anticipate that the disruption to their operations due to the pandemic would last this long; this will ensure that they are able to benefit from the loan program as expected.
But those who are able to request a top-up will only be able to do so once, according to the document.
This scheme also covers those who are self-employed or managers of public limited companies but who are not eligible for the self-employed workers’ income support scheme.
What do you need to do:
- Contact a bank directly and complete a short online application form. You will need to make an appointment to check your background, so the sooner you apply, the better.
- You can repay the loan early without penalty. Some banks allow partial refunds or overpayments.
- Payment holidays / interest only periods are now allowed – up to six months.
- Credit scores will not be taken into consideration and the loan will appear on your business credit report, NOT your personal report.
- You need a business to qualify, but you don’t need a business bank account to receive the money, although some banks may request it.
- A rebound loan does not affect other government assistance to which you may be entitled.