Originally written by Timothy Adler on Small Business
Small businesses are struggling to get loans through the Recovery Loan Scheme launched earlier this month to replace emergency schemes such as Bounce Back Loans, according to the Federation of Small Businesses (FSB).
Banks blame tougher credit checks and higher interest rates for the sluggish take-up.
Craig Beaumont, chief of external affairs at the FSB, told the Sunday Times that “the government should be throwing everything it’s got at getting businesses across this ‘unlock’ phase and into the recovery, to avoid businesses falling at the final hurdle because of lack of cashflow”.
>See also: How does the Recovery Loan Scheme compare with other alt-fi options?
Applications were in the “low thousands” in the first week, according to the Financial Times, with fewer again accepted as potential borrowers. Many of these applicants were existing users of government coronavirus loan schemes, the newspaper reported.
According to the FT, one of the largest UK banks received fewer than 500 applications in the first two days after the scheme went live on April 7. This same bank approved close to 2,000 applications in the same period when the Bounce Back Scheme opened last year.
Recovery Loan Scheme application rules are much more stringent
Tag Archive for Business loans
Hot Business News Today
Recovery Loan Scheme 2021 full update – where do I apply for my loan?
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
The Government has launched its long-awaited recovery loan scheme today (April 6).
Announced at last month’s Budget, the recovery loan scheme (RLS) has replaced the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS).
The aim of the scheme is to help businesses of all sizes to access loans and other finance so they can recover from the pandemic and move forward. It can be put towards improvements like managing cash flow, growth and investment.
Up to £10m is available per business. The minimum funding is £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts. The total amount offered is at the discretion of the participating lender. They will carry out credit checks and fraud checks before granting you the finance.
>See also: What is invoice finance?
The Government is guaranteeing 80 per cent of the finance to the lender and the borrower will always be 100 per cent liable for the debt. The annual interest rate and upfront and other fees cannot be more than 14.99 per cent.
Unlike BBLS and CBILS, the RLS is being lent on standard commercial banking terms. Kreston Reeves says that businesses will need to
Hot Business News Today
Recovery Loan Scheme 2021 full update – where do I apply for my loan?
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
The Government has launched its long-awaited recovery loan scheme today (April 6).
Announced at last month’s Budget, the recovery loan scheme (RLS) has replaced the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS).
The aim of the scheme is to help businesses of all sizes to access loans and other finance so they can recover from the pandemic and move forward. It can be put towards improvements like managing cash flow, growth and investment.
Up to £10m is available per business. The minimum funding is £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts. The total amount offered is at the discretion of the participating lender. They will carry out credit checks and fraud checks before granting you the finance.
>See also: What is invoice finance?
The Government is guaranteeing 80 per cent of the finance to the lender and the borrower will always be 100 per cent liable for the debt. The annual interest rate and upfront and other fees cannot be more than 14.99 per cent.
Unlike BBLS and CBILS, the RLS is being lent on standard commercial banking terms. Kreston Reeves says that businesses will need to
Hot Business News Today
Covid debt drowning small businesses to the tune of £104bn
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Bank lending to small businesses hit over £100bn last year as SMEs scrambled for Government-backed Covid debt facilities.
Overdraft applications flatlined, despite gross bank lending to SMEs rising by 82 per cent to £104bn.
Around 1.5m Bounce Back Loan and Coronavirus Business Interruption Loan Scheme Covid debt facilities had been approved by the end of 2020.
And nearly one third of businesses accessed grant funding last year, compared to just 2 per cent in 2019.
The pandemic has hit the smallest firms hardest, with 49 per cent of sole trader and self-employed businesses reporting a fall in turnover compared to 38 per cent of businesses with 50-249 employees.
Worryingly, despite the flood of cheap Government lending, one third of small businesses surveyed in the latest British Business Bank report expect to shrink.
Only one in five (21 per cent) were expecting to grow, compared with 28 per cent the previous year.
SMEs in business services (25 per cent) and production (23 per cent) sectors were most optimistic about their prospects for growth over the next year, with businesses in construction and other services sectors least optimistic (both 17 per cent).
Encouragingly, small businesses have amassed a war chest due to the
Hot Business News Today
Recovery Loan Scheme up to £10m will replace CBILS and BBLS
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Rishi Sunak has announced the Recovery Loan Scheme to take the place of the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme.
UK businesses of any size can apply for a loan or overdraft between £25,000 and £10m until the end of 2021. Asset and invoice finance between £1,000 and £10m will also be available. All will have a Government guarantee of 80 per cent.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000 and, as before, a borrower’s principal private residence cannot be taken as security.
The Recovery Loan Scheme opens April 6 and will run until December 31, subject to review. Like CBILS and the Bounce Back Loans, these will be available through a network of accredited lenders, whose names will be made public in the near future. Details on how to apply will be revealed in the coming weeks.
Once you receive it, the finance can be used for any legitimate business purpose, including growth and investment.
Sunak said: “Even with the new Restart
Hot Business News Today
Recovery Loan Scheme up to £10m will replace CBILS and BBLs
by Anna Jordan • • 0 Comments
Originally written by Anna Jordan on Small Business
Rishi Sunak has announced the Recovery Loan Scheme to take the place of the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme.
UK businesses of any size can apply for a loan between £25,000 and £10m until the end of 2021. Loans will have a Government guarantee of 80 per cent. Asset and invoice finance between £1,000 and £10m will also be available.
Once you receive it, the finance can be used for any legitimate business purpose, including growth and investment.
The Recovery Loan Scheme opens April 6 and will run until December 31, subject to review. Like CBILS and the Bounce Back Loans, these will be available through a network of accredited lenders, whose names will be made public in the near future.
Sunak said: “Even with the new Restart Grants, some businesses will also need loans to see them through. As the Bounce Back Loans and Business Interruption Loan schemes come to an end, we’re introducing a new Recovery Loans Scheme to take their place.”
The CBILS and bounce back loan schemes will end on March 31 2021 as previously planned. They were introduced last year to help struggling businesses through difficulties
Hot Business News Today
Which banks offer Bounce Back Loans? – how to find a BBL lender
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Which banks offer Bounce Back Loans?
Twenty-nine lenders including all the high-street banks offer Bounce Back Loans.
Adams & Company Bounce Back Loan
AIB Bounce Back Loan
Arbuthnot Latham Bounce Back Loan
Bank of Ireland UK Bounce Back Loan
Bank of Scotland Bounce Back Loan
Barclays Bounce Back Loan
Capitalontap Bounce Back Loan
Close Brothers Bounce Back Loan
Clydesdale Bank Bounce Back Loan
Conister Bounce Back Loan
Coutts Bounce Back Loan
Danske Bank Bounce Back Loan
Funding Circle Bounce Back Loan
GCBF Bounce Back Loan
HSBC UK Bounce Back Loan
Investec Bounce Back Loan
Lloyds Bank Bounce Back Loan
Metro Bank Bounce Back Loan
NatWest Bounce Back Loan
Paragon Bounce Back Loan
Santander Bounce Back Loan
Skipton Business Finance
Starling Bank Bounce Back Loan
The Co-operative Bank Bounce Back Loan
RBS Bounce Back Loan
Tide Bounce Back Loan
TSB Bounce Back Loan
Ulster Bank Bounce Back Loan
Yorkshire Bank Bounce Back Loan
Can I open a Bounce Back Loan without a business account?
Most banks say that existing personal customers will need to a separate business account to service their Bounce Back Loan.
Danske Bank, RBS/NatWest, Starling, TSB, Ulster Bank state you must open a business account, even if you’re an existing customer.
And Bank of Scotland, Clydesdale and Yorkshire Bank say you “may” need to open what they term a “feeder” account for your Bounce Back
Hot Business News Today
What happens if I can’t repay my Bounce Back Loan?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Can I apply for a second Bounce Back Loan?
Yes, you can “top-up” your existing Bounce Back Loan if you originally borrowed less than the maximum amount available to you.
However, as of November 10 2020, you cannot apply for a second, separate Bounce Back Loan either from your existing lender or another lender.
How many Bounce Back Loans can I have?
A top-up is only available from your existing BBLS lender. A borrower can apply for a top-up that is for the lesser of £50,000 or 25 per cent of the annual turnover you certified in your original successful Bounce Back Loan Scheme application form, minus the value of your original loan.
Bounce Back Loan top ups
Under the Bounce Back Loan Scheme top up, if a borrower certified an annual turnover of £100,000 in their original application and took out a Bounce Back Loan of £20,000 (20 per cent of that certified annual turnover), they can ask to borrow an additional £5,000 (5 per cent of that certified annual turnover), taking their Bounce Back Loan to the maximum 25 per cent of their originally certified annual turnover.
Varying turnover amounts certified in original loan applications and the differing
Hot Business News Today
Bounce Back Loan repayment calculator – how much will your loan cost?
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Bounce Back Loan calculator
Use the SmallBusiness.co.uk Bounce Back Loan calculator to work out how much your loan will cost in total.
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Bounce Back Loan Calculator
Work out the monthly repayments on the sum you’d like to borrow.
Turnover 2020
Maximum sum allowed to borrow
Sum to borrow (between £2,000 and £50,000)
Number of years to repay (between 1 to 5)
Estimated monthly repayments
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Hot Business News Today
Government Bounce Back Loan for your small business
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
What is the latest Bounce Back Loan news?
The Government launched the Bounce Back Loan Scheme (BBLS) on May 4 2020 to help small and microbusinesses get through the coronavirus pandemic.
Your small business can borrow a sum equivalent to up to 25 per cent of turnover, capped at £50,000 per business.
The Government will cover the first year of interest payments, meaning you have to repay the rest of the loan yourself. Interest is fixed at 2.5 per cent per annum.
Because the Government Bounce Back Loan is unsecured debt, this means the 29 accredited lenders including the high-street banks cannot ask you for personal guarantees. This means the lender cannot come after your house or personal vehicle if you default.
However, the Government Bounce Back Loan must be repaid and is not a grant.
When does the Bounce Back Loan end?
The Government Bounce Back Loan Scheme (BBLS) is due to expire on March 31.
Am I eligible for a Bounce Back Loan?
Most businesses with some exceptions can apply for a Bounce Back Loan provided they were properly trading before March 1 2020.
You must not have taken out any other form of Government Covid-19 financial support, such as a