The COVID-19 global pandemic has not only posed immediate health risks to many countries, but it has also become an impending threat to the international economy.
At this time, COVID-19 or the Coronavirus Disease continues to disturb the peace of the world, entering households like a thief in the night. This “invisible threat” to humankind has caused the cessation of otherwise “normal” operations carried out in day-to-day life. Malls, offices, entertainment facilities, and public transportation have been shut down as efforts to contain and limit the movement of the virus continue to rise. Good thing we have the upcoming Bounce Back Loan.
In the UK alone, the number of recorded cases for COVID-19 is at an alarming 157,149 with the recorded death toll currently at 21, 092 (as of April 27, 2020, 21:06 GMT). While enormous efforts have been poured into subjugating this global pandemic, the day for the curve to be permanently flattened is not yet in sight.
How Does COVID-19 Affect Businesses?
Due to the gravity of the situation, people have been ordered to stay indoors as much as possible. It means that there will be a temporary pause in the usual hustle and bustle of city life. As people’s fears grow due to the pandemic, businesses are also overwhelmed by the repercussions of non-operation.
Retrenchment and lay-offs threaten the majority of workers in the UK as businesses struggle to make ends meet. The cost of operating is far too high during these challenging times, and small to medium-sized businesses are in danger of shutting down. This could spell trouble for the economic growth of the country.
In an effort to reduce the overall impact of the lockdown to the business sector, the UK government has announced the launch of the Bounce Back Loan scheme which is meant to aid and support small to medium-sized businesses maintain their functions in spite of the debilitating effects of the COVID-19 pandemic to normal business operations.
What We Currently Know About The Bounce Back Loan
The Bounce Back Loan will serve as financial assistance to small and medium-sized businesses that are having a hard time keeping things at bay due to the current lockdown. This new loan scheme is expected to be fast and efficient and will be quickly provided to qualified businesses to help ensure their survival in this global pandemic. This is in accordance with Rishi Sunak – The Chancellor of the Exchequer.
- Businesses that qualify for the loan may borrow an amount ranging from £2000 to £50,000.
- The government will guarantee 100% of the loan to lenders.
- Business firms will be able to access these loans through a network of accredited lenders.
- A period of 12 months with no interest or fees will be given for small to medium-sized businesses that apply for the loan.
- Businesses will not be required to repay the loan in the first 12 months.
- Loan terms will go up to 6 years.
- As for the interest rates, the UK government will be in talks with lenders to ensure a just and relatively low interest.
If you are a UK-based business that is affected by the current situation of the COVID-19 pandemic, you are eligible to apply for the loan. Also, the applying business must not be included in the “undertaking in difficulty” list as of December 31, 2020. More detailed information about the eligibility requirements is expected to be announced later this week.
Banks, insurance companies, and other companies of similar nature are not eligible to apply to the said loan scheme. This goes for public or government-funded establishments, including schools and educational facilities that are grant-funded. Businesses that have taken part in the Coronavirus Business Interruption Loan Scheme (CBILS) and are in the process of claiming the said loan are not eligible to apply to BBLS.
Application for the loan will be done online and are guaranteed to be released to successful applicants in a matter of days.
The BBLS will be officially launched this May 4, 2020 – Monday, and further information about it will be announced in the following days. Be sure to check on this page every now and then for new updates!
For more information about this update, you can check Coronavirus and UK Business Government Update. Other resources about Coronavirus Business Updates can be found here.