Coronavirus update 4 May: Bounce Back Loans launched & latest COVID-19 news
Important note: WE ARE ONLY ABLE TO PROVIDE ADVICE ON THE BOUNCE BACK LOAN PROCESS TO EXISTING CLIENTS OF THP CHARTERED ACCOUNTANTS.
Today sees the government’s Bounce Back Loans launched for small businesses.
We explained how the loans will work in a blog post last week. In a nutshell, you can use the scheme to borrow up to 25% of your turnover (to a maximum of £50,000). You can borrow the money from any one of about 40 accredited lenders and each loan is 100% guaranteed by government. You need to make the application yourself – it can’t be done by your accountant, for example.
One important detail that has emerged since last week is the interest rate that loans will be charged at. This has now been confirmed at 2.5%. Remember though, that there are no fees or interest in the first 12 months.
Applications for Bounce Back Loans have been open since 9am this morning. Full guidance on how to apply is available on the British Business Bank website – although, at the time of writing, the website is struggling to cope. You will probably have more success if you apply direct to the lenders.
Bounce Back Loans launched by lenders
Lenders have now started putting online Bounce Back Loan application systems on their websites or online banking facilities. At the time of writing there are eight lenders you can apply for a loan with including Santander, Natwest , Barclays , Ulster bank and RBS (via online banking). However, it’s worth noting that if you don’t have an account with a specific lender, they are almost certain to ask you to open one – and this can result in an additional delay.
If you want to apply, check with your chosen lender about how to do it.
- You can apply for loans between £2,000 and £50,000 (depending on turnover)
- You need to make the application – unfortunately, we cannot do it for you
- There is a quick, standard form to complete (it is seven questions long)
- You don’t have to make repayments or pay interest for the first 12 months
- You should receive your money within 24 hours of approval. The Treasury says funds should be available ‘within days’
- If you have a loan of under £50,000 via the Coronavirus Business Interruption Loan Scheme (CBILS), you should be able to convert it to a Bounce Back Loan (BBL).
While the loans are 100% guaranteed by government, there will still be affordability checks (albeit lighter than normal). If you miss future repayments, government requires banks to chase you. This could have a negative impact on your business’s credit rating. If you’d like to discuss Bounce Back Loans in the context of your firm’s accounts, please do get in touch with us for advice.
Also in the news
Other current stories that may interest business and our clients include:
- Businesses may have to adopt strict hygiene measures before they can reopen. The Guardian reports employees may require physical shields, PPE and limits on the time they spend in proximity with each other. The BBC has more detail on the same story.
- Also in the Guardian, some 500 businesses with business interruption insurance policies have joined forces to take legal action against Hiscox. They claim their policies stated the insurer would pay out in the event of a notifiable disease.
- In a more positive story, one flour mill in Northumberland has seen a 500% increase in demand since the pandemic began to bite. Hopefully we’ll begin to see more flour on the supermarket shelves before too long – there are a lot of frustrated bakers out there at the moment!
If you need any help or advice with your business’s accounts or finances – whether related to coronavirus or not – remember we’re here for you. Whether you want to drop us a line or give us a call, we’ll do our very best to help.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.