What businesses need to know about the Bounce Back Loan Scheme (BBLS)?
Many UK business owners are struggling to keep their doors open during the COVID-19 pandemic. Fortunately, the British government, under the administration of the British Business Bank, has launched the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS).
These government-backed loaning schemes are designed to help businesses who lost revenue due to the pandemic and enforced lockdowns. But what exactly should a business owner like you know to apply and avail of the loans successfully?
This article talks about the BBLIS scheme and other effective solutions to help you, as a business owner, make a well-informed decision. First, we will discuss the BBLS and the specifications of the scheme. Then, we will discuss the Coronavirus Business Interruption Loan Scheme or CBILS for. And lastly, we will talk about accountancy services to help you manage your business finances effectively.
1. Take note of requirements and important deadlines for BBLS
The BBLS scheme is made for businesses to effectively refinance existing debt on the balance sheets due to losses during the COVID-19 pandemic. It provides loans from £2,000 to £50,000 for up to 25% of turnover for repayment terms of six years—and you can even opt for early repayment. However, all BBLS applications must be turned in before November 4, 2020, and businesses must keep in with their lenders for further announcements!
The BBLS’ interest rate is at 2.5% with a 100% guarantee, meaning that you can de-risk your business in case you are unable to repay or fall into default. However, the borrower must be liable for the repayment of their debt; as such, some of the usual consumer protections under the Consumer Credit Act 1974 don’t apply.
The BBLS has certain key requirements for businesses before they apply. For one, they need to be either a UK-limited business or tax resident that was in operations until March 1, 2020. The BBLS loans should not be used for personal purposes and must be used for the economic benefit of the business to address losses during the COVID-19 pandemic.
The business applying for BBLS cannot be in a state of bankruptcy, within debt restructuring proceedings, or in liquidation. This is where businesses’ accountant practice, like balance sheets and different financial statements, can validate your eligibility.
You, as a business owner, must be willing to undergo standard checks to verify your eligibility for the BBLS through the accredited lender. The following checks are the Anti-Money Laundering (AML), Know Your Customer (KYC), customer fraud, and other related checks determined by the lender. These help to also satisfy the BBLS’ stipulation to further verify if your business was not a business in difficulty as of December 31, 2019, as according to the British Business Bank’s definition.
The UK government has strongly advised business owners considering the BBLS to consult with accountancy services from chartered accountants from the Institute of Chartered Accountants in England and Wales (ICAEW). Doing so ensures that their businesses can easily apply for the BBLS through accredited lenders and access risk factors early on.
Overall, the BBLS is a crucial tool for you, as a business owner, to look into, especially due to its flexibility in payment and a viable means to help you reopen your doors even amidst the pandemic. As such, consult with professional accountancy services to guide you through the BBLS in reference to your business and its future.
2. Consider the CBILS and take note of important information and deadlines
If you are running a small business and need more than the BBLS, you can also apply for the CBILS, which has also become a viable refinancing solution among industry leaders and accounting services for small business.
Just like the BBLS, the CBILS is made to provide SMEs in the UK who experienced revenue losses due to the pandemic. You can apply for it if you have reconsidered your business cash flow projections and are in need of more funding to stimulate economic stability and growth. It has loans ranging from £50,001 to £5 million and can be applied for up until October 20, 2020—which is, again, subject to change depending on the British Business Bank.
The CBILS requires businesses applying to have an annual turnover of no more than £45 million and have been self-certified that you have been adversely affected by the COVID-19 pandemic. You also need to have a borrowing proposal that your lender must first approve.
Businesses have been affected by the COVID-19 pandemic, but fortunately for you, there are different refinancing options through the BBLS and CBLIS. This ensures that you have the means to financially secure your own business; however, you must also find professional accounting services to advise you comprehensively. Take note of all the previously mentioned information and be on the lookout for viable accountancy solutions today!
Are you looking for some help navigating the intricacies of the BBLS? 1 to 1 Accountants can provide you with professional accountancy services in the UK and help you keep your finances in check during these trying times. Consult with us today about BBLS, CBLIS, and find viable means to safeguard your business financially!