Announced the end of last week, and open for application from today, 4th May 2020.

The Bounce Back loans are a simplified form of loan, compared to the Coronavirus Business Interruption Loan Scheme (CBILS).

Per HM Government:

The Bounce Back Loan scheme helps small and medium-sized businesses to borrow between £2,000 and £50,000.

The government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.

You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • was not an ‘undertaking in difficulty’ on 31 December 2019

The major differences to the Coronavirus Business Interruption Loan Scheme (CBILS). would seem to be:

Bounce Back CBILS
Maximum loan The lower of £50k or 25% of turnover £5m
Term Up to six years, no early repayment fees Between three and six years depending on type of finance
Payment Holiday Up to 12 months Discretionary
Government Guarantee 100% 80%
Fees and Interest charged to borrower No fees / interest first year, then 2.5% interest No fees or interest first year.  Presumably commercial rates thereafter.
Security No security to be taken, lenders prohibited from recovery over personal assets like home Security may be required, but absence of security should not be a reason for turning loan down
Personal Guarantees (where borrower is a company) No guarantees. Personal Guarantees may be required on amounts over £250k, private home excluded and recoveries capped at 20% of the loan.
Application Process Simplified process on a lender by lender basis Requirements vary from lender to lender, but are likely to include:

  • Management accounts
  • Business plan
  • Historic accounts
  • Details of assets

On the guarantee and security issue, its not as bright as it seems – the borrower is still responsible for 100% of the loan.  Guarantees and security make the lenders recovery process easier.