Bounce Back Loan. Did it work for you?

The Bounce Back Loan Scheme (BBLS) was set up in April 2020 to provide access to finance to small and medium-sized businesses adversely affected by the coronavirus outbreak.

The scheme allowed any qualifying business to borrow between £2,000 and up to 25% of their turnover up to a maximum of £50,000. The government guarantees 100% of the loan with no fees or interest to pay for the first 12 months. After 12 months the interest rate was set at 2.5% a year.

According to a BBC report a quarter of UK business applied for the loan for a total value of 47bn. In practice not many checks were carried out by banks. Virtually any business applying for the loan was granted access to finance.

How can the bounce back loan assist your business?

The Bounce Back loans were made on the condition that they were not to be used for personal purposes, but could be used, for example, to purchase a company asset such as a company van, if it would provide an economic benefit to the business.

Many businesses have successfully applied the bounce back loan to weather the storm during the pandemic. As accountants, we helped our clients to manage and protect company resources and will be happy to assist you now as we gradually recover from the effects of the pandemic.

What happens if you can’t afford to pay back bounce back loan?

The money lent to your company under the Bounce Back loan scheme must be paid back, over 6 or 10 years, with payments starting 12 months after your company receives the loan.

According to HM Revenue and Customs, If the money your company borrowed is not repaid, your company may be investigated by the Insolvency Service, even if it has been dissolved. 

A much better option is to seek the help of your accountant and prepare a sound business plan. We can assist in making sure that your business continues to grow and benefits from the various finance options available to you to manage your company resources and cash flow.

Why not give us a call and see how we can help?