Bounce Back Loan Scheme (BBLS) – a Government finance scheme dedicated to smaller businesses hit by coronavirus

This coronavirus support scheme went live on 4 May and allows businesses to take Government-backed loans of up to £50,000.

20 May 2020

This page was last updated on 12 May, and will continue to be reviewed when new Government information is announced.

What is the Bounce Back Loan Scheme?

The scheme went live on 4 May 2020 and is aimed at small and micro businesses and sole traders. The BBLS offers:

  • loans from £2,000 – £50,000, up to ¼ of your turnover
  • a fixed 2.5% interest rate per year over six years
  • no personal guarantee
  • no payments, interest or fees due for the first 12 months
  • a simple application, fast approval and cash in your account within days
  • no restrictions on how the funds are used, including refinancing existing debt
  • no early repayment fees

For loans of £50,001 or more, small business owners should consider applying to CBILS.

What's the difference between BBLS and CBILS?

Working out the differences between the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS) can be a little tricky, so we've designed a table to help you get to grips with them both. For more information on eligibility for each scheme, click the link to the relevant article.

Bounce Back Loan Scheme (BBLS)Coronavirus Business Interruption Loan Scheme (CBILS)
How much can I borrow?£2,000 – £50,000 (up to 25% of annual turnover)£50,001 – £5m
How long does the Government pay the interest?First 12 monthsFirst 12 months
Do I get a repayment holiday?Yes, 12 monthsVaries lender to lender
What's the interest rate?Fixed at 2.5% per yearVaries lender to lender
How long is the term?Fixed at six yearsBusiness loans and asset finance: up to six years < br/> Overdrafts and invoice finance: up to three years
Are there early repayment fees?NoNo
Is there a personal guarantee?NoAbove £250,000
Can I use it to refinance existing debt?YesYes
EligibilityBBLS eligibilityCBILS eligibility

What does 100% guaranteed by the Government mean?

The Government is guaranteeing 100% of losses to the lender, while the borrower remains fully liable for paying back what they owe. The reason for doing this is that it encourages lenders to make funds available to businesses in need, without taking on the risk of doing so.

The Bounce Back Loan is not a grant – meaning as the borrower, you will have to pay back the funds you receive plus interest accrued.

How do I apply?

Applications can be made through accredited lenders' websites and have been designed to be quick and easy, with minimal paperwork. Click the bank's name in the table below to navigate to their application form.

If your bank isn't offering BBLS, check which banks are currently serving non-customers below. You could also consider opening a new account with an accredited lender to get quick access to funds through this scheme.

Lender nameAccepting non-customers?
Allied Irish BanksNo
Bank of Ireland UKNo
Bank of ScotlandNo
BarclaysNo
Clydesdale Bank (Use their calculator to apply)No
Danske BankNo
HSBCYes, additional checks needed
JCB Finance (Not yet open for applications)TBC
Lloyds BankNo
Metro Bank (Applications temporarily closed)No
NatWestNo
Royal Bank of ScotlandNo
SantanderNo
Skipton Business FinanceTBC
Starling Bank – applications from 11 MayNo (easy to create account)
The co-operative bank – need business current accountNo
tideNo (easy to create account)
TSBNo
Ulster BankNo
Yorkshire BankNo

The Bounce Back Loan Scheme – FAQs

How much can I get?

Small businesses will be able to receive a loan of between £2,000 – £50,000, limited to 1/4 of their annual turnover.

Am I eligible for this scheme?

In order to apply for a loan your business must:

  • be based in the UK
  • have been negatively affected by coronavirus
  • not been in difficulty on 31 December 2019
  • have been established by 1 March 2020
  • derive more than 50% of its income from its trading activity

Some businesses are not eligible for the scheme, these include:

  • banks, insurers and reinsurers (insurance brokers are eligible)
  • public-sector bodies
  • state-funded primary and secondary schools

How much interest will I have to pay?

Rishi Sunak has announced that accredited lenders will offer Bounce Back Loans at a fixed rate of 2.5% per year, with the first 12 months of interest paid by the government. This low rate has been set to give small businesses the capital they need at an affordable price.

How long will the loan last?

Loan terms will be up to six years, but you will not be charged any early repayment fees if you choose to settle up before the end of your loan term. No repayments, fees or interest will be due for the first 12 months.

When will I get the money?

This scheme has been designed to help businesses as fast as possible, so the Government has said that funds could be available in as little as 24 hours from the time of applying.

Is this a loan or a grant?

This scheme offers loans that will need to be paid back. Business owners should consider whether it is affordable for them to take on debt when making the decision to apply.

Can I apply to CBILS and the Bounce Back Loan?

If you’re already claiming under the CBILS scheme then you cannot apply for a Bounce Back Loan too. However, if you have a CBILS loan or overdraft for £50,000 or less then you can transfer it to a Bounce Back Loan up until 4 November 2020.

If you take a BBLS loan and then need more funds to get through the coronavirus crisis, you may be able to take a larger CBILS loan and use part of it to refinance your BBLS loan.

More details on the exact way this will work will be published by the British Business Bank on their BBLS FAQ page

Is iwoca an accredited lender?

iwoca is not accredited for the BBLS, however we are an accredited CBILS lender. Find out whether you can apply for a CBILS loan with us.

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Dan is part of the content team at iwoca. He writes articles explaining financial topics, as well as guides on the best support for small businesses during coronavirus.

Article updated on: 8 October 2020

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