Bounce Back Loan Scheme

Bounce Back Loan Scheme

The Chancellor has written to all accredited CBILS lenders on the new Bounce Back Loan Scheme (BBLS) that provides for a 100% government guarantee.

The key points from the letter are:

  • Interest rate set at 2.5%
  • The minimum facility size for term loans and overdrafts under current CBILS will increase to £50,001 to avoid any risk of confusion or overlap between the two schemes. This change to the minimum facility size will not apply to asset finance and invoice finance CBILS facilities
  • Any customer with a CBILS loan or overdraft of £50,000 or less will be able to switch that facility to a BBLS loan should they choose to do so over the next few months

The 2.5% rate is lower than the banks have been offering on the CBILS facilities so there is a logic in businesses switching where relevant. It also provides a useful benchmark to judge bank offers under CBILS.

What we know so far:

  • The Bounce Back Loan scheme will help small and medium-sized businesses to borrow  from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000.
  • The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
  • Loan terms will be for 6 years but early repayment is allowed, without early repayment fees. No repayments will be due during the first 12 months.
  • The rate of interest will be 2.5% pa
  • Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).
  • There is no fee to access the scheme for either businesses or lenders.
  • The scheme will be delivered through a network of accredited lenders.


You can apply for a loan if your business:

  • is based in the UK
  • has been negatively affected by coronavirus

You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). However if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.

The Chancellor’s letter can be found here

Links to application forms


If you have concerns or questions, please contact us on 01932 830664 or through your usual client partner contact. As further details are announced, we will keep you informed.

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About the author

Richard Hayward is a WardWilliams partner who advise clients of the latest rules and regulations.