Increasing Bounce Back Loans & Interruption Loans

Increasing Bounce Back Loans & Interruption Loans There has been a fair bit of change around the terms on which these loans were offered. Some of it, I’m pleased to say has seen common sense prevail. That said, the deadline for these loans remains 31st January and there doesn’t look like being a further extension. […]

November 28th, 2020

Increasing Bounce Back Loans & Interruption Loans

There has been a fair bit of change around the terms on which these loans were offered. Some of it, I’m pleased to say has seen common sense prevail. That said, the deadline for these loans remains 31st January and there doesn’t look like being a further extension.

What do the changes mean? Let me clarify.

Loan Term

The repayment term for both Bounce Back Loans and Coronavirus Business Interruption Loans has been increased from 5 years to 10 years. Lenders will contact you direct before you start making repayments to give you the options and figures.

This contact should happen automatically. If you do get to the stage of your repayments due to begin and have had no contact from that lender then give them a bell. This should all happen automatically though.

Increasing Bounce Back Loans

Facts;

Previously, if you took a bounce back loan you could not apply for again, that has changed
If you took less than the maximum you were eligible for you can now ‘top up’ that loan
You can borrow up to £50k or 25% of turnover, whichever is the lower
You need to apply to the same lender as your original loan
The increase is added to your original loan, the same 2.5% fixed interest rate applies

If you want a hand with obtaining an increase then get in touch.

Interruption Loans

Facts;

You can apply for up to 25% of turnover
You can have as many loans with as many lenders as you want, so long as you borrow only up to 25% of turnover
Individual loans up to £250k cannot have a personal guarantee supporting them. This is per loan, not the total amount of the loans you have, so two £250k loans can be better than one £500k loan
The Government pays the lender costs and first year interest for you
Just because you have one loan doesn’t mean you cannot apply for another, either with the same lender or another lender
Lenders have different policies. Some are happy for you to have loans elsewhere, others aren’t. If you want the finer details then please ask
You can use these loans to refinance other borrowing

Property Finance

Coronavirus Interruption Loans can be used for property. There are lenders who will lend for property, development and refinance. If you have a property project and are looking for finance then it may be worth exploring CBILS before it disappears forever. Get in touch

The Big Detail

We have seen the expiry date for these loans extend a couple of times. With the news that a vaccine is, thankfully, on the horizon then I am not expecting these schemes to extend again. The caveat here is whether the Chancellor decides to close these schemes at the same time as Furlough, at the moment there are no indications this will happen.

This means that the clock is ticking and any increase in Bounce Back Loans, or Interruption Loans needs to happen in the next few weeks.

If you have any questions then get in touch. For generic questions more info is available on our Coronavirus Finance page.

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.