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All you Need to Know About Bounce Back Loans

Bounce Back Loans | UK | LoanTube

Businesses are struggling to get back on their feet after the damage done by the global pandemic. The revenue of small businesses, in particular, has taken a severe hit, due to which they’re facing a disruption in cash flow. After seeing the plight of these businesses, the UK government announced a Bounce Back Loan Scheme (BBLS) to alleviate this financial crisis.

Here are all your questions about Bounce Back loans, answered:

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Loan Amount

£4000 -

£20000

Norwich Trust

Loan Term

1 -

10 years

4.8/5

4.8/5

Representative APR

31.90%

Minimum Age

21 Years

Minimum Income

£2000 per month

Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.

4.8/5

4.8/5

Norwich Trust

Loan Amount

£4000 -

£20000

Loan Term

1 -

10 years

Representative APR

31.90%

Minimum Age

21 Years

Minimum Income

£2000 per month

Representative Example: £12,000 over 66 months, 31.9% APR fixed. Monthly payment £358.22 Annual interest rate 28.01% fixed. Interest payable £11,642.52. Total repayable £23,642.52.

Loan Amount

£5000 -

£100000

Evolution Money Loans

Loan Term

1 -

20 years

4.5/5

4.5/5

Representative APR

28.96%

Minimum Age

18 years

Minimum Income

Not mentioned

Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00

4.5/5

4.5/5

Evolution Money Loans

Loan Amount

£5000 -

£100000

Loan Term

1 -

20 years

Representative APR

28.96%

Minimum Age

18 years

Minimum Income

Not mentioned

Representative Example: Loan Amount: £20950.00, Loan Term: 85 Months, Interest Rate: 23.00% PA Variable. Monthly Repayments: £537.44. Total Amount Repayable: £45,682.15. This example includes a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00

Loan Amount

£1000 -

£10000

1Plus1 Guarantor Loans

Loan Term

1 -

5 years

4.4/5

4.4/5

Representative APR

39.90%

Minimum Age

18 years

Minimum Income

Not mentioned

Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.

4.4/5

4.4/5

1Plus1 Guarantor Loans

Loan Amount

£1000 -

£10000

Loan Term

1 -

5 years

Representative APR

39.90%

Minimum Age

18 years

Minimum Income

Not mentioned

Representative Example: Borrowing £3000 over 36 months with a representative APR of 39.9% (variable),the amount payable would be £134.21 a month,with a total cost of credit of £1831.56 and a total amount payable of £4831.56.

What are bounce back loans?

  • The Bounce Back Loan Scheme that was launched on May 4’ 2020, aims to aid small businesses to sustain themselves in the market. These are easy access loans ranging from £2000 to £50,000. Once approved, you’ll be handed over the money only within a few days. Bounce Back Loans are completely government-funded for lenders, and the application process is quick and hassle-free.

What is the bounce back loan eligibility criteria? 

You will be eligible to file a Bounce Back Loan application if:

  • Your business is established in the UK
  • You started your firm before March 1’ 2020
  • Your business has been gravely affected by the Coronavirus pandemic

In the event that your business was in the ‘business in difficulty’ category before Dec 31’ 2019, you will need to ensure that you are abiding by the additional state aid restrictions.

Who can and cannot apply?

Any businesses meeting the eligibility criteria, except for banks or insurers, public sector bodies, government-funded schools. You will also not be eligible for this loan if you’re already getting funded via one of these schemes:

  • Coronavirus Business Interruption Loan Scheme (CBILS)
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS)
  • COVID-19 Corporate Financing Facility

However, those who have already received money up to £50,000 through one of these schemes, can arrange with their lender to transfer it to BBLS before November 4’ 2020.

How to apply for a Bounce Back Loan? 

  • You can avail a Bounce Back Loan through a board of lenders accredited by the British Business Bank, as per their website. As of now, there are 26 lenders on the accredited lenders board, of the likes of Santander, AIB, Lloyd’s Bank, HSBC UK and Starling Bank. All you need to do is fill a brief online application form with a self-declaration of your eligibility for this loan. Lenders will require basic information like the Company’s name, registration details and turnover. Now the lender will assess whether you’re eligible for this loan, or a different type of finance that could help you better.

How much bounce back loan can I get?

  • The cap on Bounce Back Loans is £50,000. A business can file a loan worth of up to 25% of their annual turnover, at a fixed rate of 2.5%. The government will fund the repayment of this loan for the first 12 months. HSBC UK offers this loan for a tenure of 6 years, with zero charges levied on early repayment.

What can the bounce back loan be used for?

There are various ways a Bounce Back Loan can become your savings grace. However, lenders clearly mention in their application forms that these loans should count towards the economic well-being of the business, not personal usage. We have listed down a few ways to use BBLS, just to give you an idea:

  • Use BBLS to cover your investment costs – bills, wages or debt.
  • Use BBLS to invest in your business for expansion
  • If you have the resources, use it increment wages of employees and help them mitigate their struggle
  • Improve general cash flow with a BBLS

If you don’t get the response you expected…

  • A lender may turn you down based on your profile. However, you can always apply to other lenders on the accredited lenders list, as you may be a better fit for another lender. You can always consider a broker service to help you find the right type of finance for yourself.
  • Small businesses are a significant part of the economy. They create a number of job opportunities for a variety of sectors. Given the ongoing economic crisis, securing them is important, as they are the ones that are struggling to recover. Therefore the BBLS scheme is an excellent opportunity for suffering small businesses to get a grip.

 

Representative 79.5% APR

Warning: Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk

Credit subject to status & affordability assessment by Lenders.

LoanTube is a credit broker and not a lender.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on any debt secured against it.

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Representative APR Example

The rate you are offered will depend on your individual circumstances.

Representative APR Example: On an assumed loan amount of £1,000 over 18 months. Rate of interest 59.97% per annum (fixed). Representative 79.5% APR. Total amount payable £1,554.10 of which £554.10 is interest. 17 equal monthly repayments of £86.09, and the final month’s payment of £90.57.

Some of the offered loans might be classed as High Cost Short Term Loans. APR rate starts from 18.22%. The maximum APR rate is 1721%, but you will get a personalised rate tailored to you. The minimum repayment term is 3 months, the maximum repayment term is 7 years. The minimum loan amount is £250 and the maximum loan amount is £35000.

Warning: Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk

Credit subject to status & affordability assessment by Lenders.

LoanTube is a credit broker and not a lender.

Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on any debt secured against it.

Not all borrowers will qualify for a loan. The operator of this website does not engage in any direct consumer lending, we simply provide you a FREE loan brokering service. This means LoanTube does not charge customers a fee for using its introducer services, but it receives a commission from lenders or other brokers if a customer enters into a consumer credit agreement with them following an introduction by LoanTube.

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