Does Your Business Have Cash Flow Problems Due To COVID-19?

The government has rolled out Bounce Back Loans, a digital loan scheme, to support small businesses with their cashflow in the immediate future

You will be able to access these loans through a network of accredited lenders.

Launched on Monday 4th of May, the scheme fast-tracks funding to Small/Medium sized businesses with loans that are 100% government-backed guarantee for lenders. The government will also pay any fees and interest for the first 12 months (no repayments will be made within this time).

Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.

Businesses can apply online through a short and simple form, where you will be required to fill in a two-page application form in which you will certify that you have a viable business, lifting obligations on lenders to carry out their own checks.

Loan terms are up to six years.

All firms trading as of the 1st of March will be able to make an application for the Bounce Back Loan scheme.

Banks will no longer require forward financials or business plans.

You can’t apply if you already have a coronavirus business interruption loan but you can transfer your existing loan of up to £50,000 across.

The Bounce Back Loans scheme is capped at 25 per cent of turnover and promises a streamlined application process.

This is in addition to business grants, tax deferrals and the job retention scheme.

The government has said it will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.

With the effects of Covid-19 likely to have a lasting effect on various industries for the 12 months, we urge you to think about how this scheme could benefit your business on a more long basis rather than short term cash flow, in which the business grants, tax deferrals and the job retention scheme have hopefully aided somewhat.