It’s been four days since the launch of the Bounce Back Loan Scheme which allows business owners to apply for up to £50,000 to a maximum of 25% of their turnover.
So far, the banks that are set up include: Ulster Bank, HSBC, Yorkshire Bank, TSB, Bank of Scotland, TSB, Barclays, Danske Bank, Clydesdale Bank, NatWest, Lloyds Bank, Santander, and RSB. While some banks are only taking applications from their own customers, the Treasury has commented that the loans should be extended to everyone (including non-customers) as soon as possible.
Since launching, chancellor Rishi Sunak revealed that more than 69,000 Bounce Back Loans worth over £2bn were approved during the first 24 hours, but what if you’re struggling to get a Bounce Back Loan from your bank?
Philip Brennan, Managing Director at Business Comparison said, “As businesses are not required to demonstrate a financial need for the loan, some savvy business owners are using this once in a lifetime opportunity for cheap unsecured business lending to grow their business, with some planning to use it to consolidate personal debts or invest in equipment.
Of course, this money does need to be repaid so it should not be undertaken lightly, and you should consider whether you would be able to make repayments if your business did not recover as quickly as you hoped. However, the risks associated with this type of lending are much lower than traditional routes and it should come as a welcome relief to the smallest enterprises in the UK and for others, it could be the ‘growth’ money they have been unable to secure until now.
If you’re struggling to get hold of your bank or are experiencing delays in receiving confirmation on whether you are eligible for the Bounce Bank Loan Scheme, look into the other financial support available to businesses, including 12-month business rates holidays, grants of up to £10,000 for small businesses to help with ongoing business costs, and “time to pay” arrangements with HMRC to suspend debt collection until SMEs can afford to repay their tax bills.
“Additionally, self-employed workers can get up to 80% of their profits paid by the government for the next three months (up to wages of £2,500 a month) so it’s definitely worth looking into alternative government loans, grants and support schemes your business could claim to help get you through these difficult times.
However, with not all businesses banking with the largest lenders who are currently involved in the Bounce Back Loan scheme, the government will need to ensure that the scheme meets demand as quickly as possible, with speed being vital for the survival of many small businesses which remain closed and are struggling during lockdown.”