By Selina Maycock published
As the UK heads into its second lockdown, business owners have been given access to extra cash in order to boost their finances over the coming months.
The treasury, which has extended its emergency business loan scheme will allow firms to apply for more cash to “top up” their borrowing in a bid to help more companies survive the economic impact of the Coronavirus pandemic.
It comes after people are left wondering when will nail bars open again in the UK?
Here’s what you need to know...
What are bounce back loans?
Small Businesses can apply for up to £50,000 loan, with no interest charges or repayments needed in the first 12 months. After 12 months, all banks will charge a fixed 2.5% annual interest but this is much cheaper than a personal loan. The loans were originally to last six years but this has been extended to 10 years.
Your business must have been set up before 1 March 2020 and must still be trading going concern at the point of application (temporary cessation due to coronavirus doesn't matter) – and the reason for any issues must be due to coronavirus.
Extra time to apply:
A two month extension was granted for the application process.
UK businesses have until 31st January 2021 to apply for emergency business loans, including bounce back loans (BBLS) Coronavirus bounce back interruption loans (CBILS) and the CLBILS for larger firms.
Rishi Sunak confirmed on Twitter, “To help more businesses access additional support, deadlines for applications to our government-backed loan scheme and the Future Fund have been further extended until 31 January 2021.”
To help more businesses access additional support, deadlines for applications to our government-backed loan schemes and the Future Fund have been further extended until 31 January 2021. pic.twitter.com/UhrZZtQKxQNovember 2, 2020
Small businesses who have already accessed cash through the government-backed BBLS programme, offering loans from £2,000 up to £50,000 (capped at 25% annual turnover), will still be able to apply to borrow extra money. So if they didn’t take out the full amount first time, they can top-up by applying for extra cash this time.
So far 1.3m businesses have benefited from £40.2bn.
A government document outlining the changes said, “We understand that some businesses didn’t anticipate the disruption to their business from the pandemic would go on for this long; this will ensure that they are able to benefit from the loan scheme as intended.”
But those who are able to request a top-up will only be able to do so once, according to the document.
This scheme also covers those who are self-employed or limited company directors but who don't qualify for the Self-Employment Income Support Scheme.
What you need to do:
- Contact a bank directly and fill in a short online application form. You will have to book a background-check appointment, so the sooner you apply the better.
- You can repay the loan early without penalty. Some banks allow part-repay or overpay.
- Payment holidays / interest only periods are now allowed - of up to six months.
- Credit ratings won't be taken into consideration and the loan will go on your business credit report NOT your personal one.
- You need a business to qualify, but you don't need a business bank account in order to receive the cash, although some banks might request this.
- A bounce back loan does not affect other government support you might be entitled to.
Selina is a Senior Entertainment Writer with more than 14 years of experience in newspapers and magazines. She currently looks after all things Entertainment for GoodtoKnow, Woman&Home and My Imperfect Life.
Before joining Future Publishing, Selina graduated from the University of Sheffield in 2006 with a degree in Journalism. She is fully NCTJ and NCE qualified and has 100wpm shorthand. Having spent the start of her career working on local newspapers and online, Selina spent six years as Acting News Editor and Entertainment Reporter at the Scunthorpe Telegraph where she dug into hard news stories, conducted interviews, covered court reporting, features, and entertainment, whilst going to gigs in her spare time.
Whilst at the paper she was awarded an O2 Media Judges' Special Award for helping a terminally ill cancer sufferer realise his dying wish and marry his childhood sweetheart through a successful newspaper campaign. Things like this are close to her heart when it comes to using journalism to make a positive difference in people's lives.
Selina later branched further into all things celebrity to became a Showbiz Writer at Heat magazine, covering red carpet events, showbiz parties, and various launches before going freelance for two years. One of her biggest celebrity achievements - aside from generating celebrity exclusives - was interviewing Take That (including Robbie Williams) and bumping into Simon Cowell so much at events she told him 'I'm calling you my showbiz dad!'
In 2017 she joined TI Media as a senior reporter on Woman, Woman's Own, Woman&Home, Woman's Weekly celebrity desk before branching online in 2020 when Future gave her the opportunity to focus on digital-first.
When she's not interviewing celebrities you can find her exploring new countryside walking routes, catching up with friends over good food, or making memories.
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