The Bounce Back Loan Scheme (BBLS) for existing Close Brothers customers
Close Brothers & BBLS
The Bounce Back Loan Scheme (BBLS) is a government initiative to help UK small and micro businesses in all sectors, providing loans from £2k up to 25% of the business’ turnover with a maximum loan of £50k. Close Brothers is an accredited lender, you can apply for a BBLS loan if you are an existing Close Brothers Asset Finance customer by contacting your Close Brothers representative.
Following the Chancellor of the Exchequer’s announcement on 27 April 2020, the Bounce Back Loan Scheme is now open for applications. Delivered by lenders accredited by the British Business Bank for this scheme, Bounce Back Loans target small and micro businesses in all sectors1, providing loans from £2k up to 25% of the business’ turnover with a maximum loan of £50k. Providing lenders with a 100% government-backed guarantee and standardising the application form is expected to lead to a faster process with many loans becoming available within days.
1 Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), public sector bodies, a state-funded primary or secondary schools and insurance companies are not eligible to apply and subject to State-Aid restrictions.
- Up to £50,000 loan: Loans will be from £2,000 up to 25% of a business’ turnover or £50,000, whichever is lower.
- 100% guarantee: The scheme provides the lender with a government-backed, full guarantee (100%) against the outstanding facility balance, both capital and interest. The borrower always remains 100% liable for the debt.
- Interest rate: The government has set the interest rate for this facility at 2.5% per annum, meaning businesses will all benefit from the same low rate of interest.
- Interest paid by government for 12 months: The government will make a Business Interruption Payment to the lenders to cover the first 12 months of interest payable, so businesses will benefit from no upfront costs.
- No principal repayments for first 12 months: Borrowers will not have to begin principal repayments for the first 12 months, thereafter capital will be repaid on a straight line basis.
- No guarantee fee for businesses or lenders to access the scheme
- Finance terms: The length of the loan is for six years but early repayment is allowed, without early repayment fees.
- No personal guarantees: No personal guarantees are allowed, and no recovery action can be taken over a principal private residence or principal private vehicle.
The Bounce Back Loan Scheme enables businesses to obtain a six-year term loan at a government set interest rate of 2.5% a year.
The government will cover interest payable in the first year.
Note: The guarantee is to the lender, not the borrower. The borrower always remains 100% liable for the debt.
Businesses from all sectors can apply for a facility.2
The business must self-certify to its lender the following:
- Confirm it is UK-based in its business activity, and established by 1 March 2020
- Confirm it has been adversely impacted by the Coronavirus (Covid-19)
- Confirm it is not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)
- Confirm it is not in bankruptcy, liquidation or undergoing debt restructuring
2 Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), public sector bodies, a state-funded primary or secondary schools and insurance companies are not eligible to apply.
The Bounce Bank Loan Scheme (BBLS) is managed by the British Business Bank on behalf of, and with the fnancial backing of the Secretary of State for Business, Energy and industrial Strategy (BEIS). British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on BBLS and the list of participating lenders can be found on the British Business Bank website: www.british-business-bank.co.uk