Everything You Need To Know When Applying For the Coronavirus Bounce Back Loan Scheme (BBLS)
Earlier this week the government announced that the Coronavirus Bounce Back Loan Scheme (BBLS) had opened for applications. In light of the immense struggle of some businesses to access CBILS, NextFin has compiled a detailed guide on all the necessary requirements when applying for BBLS.
What is the Bounce Back Loan Scheme?
After some businesses struggled to access credit through the Coronavirus Business Interruption Loan Scheme (CBILS), the Chancellor announced a new Bounce Back Loan Scheme (BBLS).
The main difference between the BBLS and the CBILS is that the government guarantees 100 per cent of the finance, plus you can only access a maximum of £50,000.
Operated through the British Business bank, through the scheme:
- you can receive up to 25% of your turnover
- the government guarantees 100 percent of the finance to the lender
- the government pays the first 12 months of interest
- interest is capped at 2.5%
- the loan term is six years, but early repayments can be made.
Full eligibility criteria can be found in our earlier article.
The application process
1. Approaching your lender
In the first instance, you should approach your own provider. While there is nothing stopping you from approaching other providers, the Financial Times reports that out of the 10 lenders taking part, only HSBC has offered non-customers a loan.
2. Complete self-certification
Part of approaching your provider will involve you filling out a short online form which self-certifies that your business is eligible for a loan.
Once the provider has established whether your business is eligible, it will be “subject to appropriate customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks”.
Only basic details are required to verify the company exists and is eligible. Company directors self-certify that the information they provide is correct and their lender then decides whether or not to approve the loan. Companies may be required to provide a tax return in a small number of cases
3. Your provider will make a decision
Your lender will decide whether to offer you finance. Unlike the CBILS, your lender can’t ask for a personal guarantee and the loans are guaranteed 100 per cent by the government.
Because banks are not on the hook for losses under the scheme, they will not have to carry out their normal full credit checks and procedures which can time be consuming. Some firms had complained of being rejected arbitrarily for a CBILS loan. The new scheme should avoid that outcome.
Disclaimer
To the best of our knowledge, the information we have provided is correct at the time of publishing. We recommend that you seek professional advice on any topic discussed.
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