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What is a Bounce Back Loan (BBLS): Is my business eligible, how do I apply and what is my liability?

The Bounce Back Loan Scheme (or BBLS) is a government initiative for small businesses across the UK who have been affected by coronavirus. Through this scheme, UK SMEs and micro businesses will be able to access finance of between £2,000 to £50,000. Loans are offered on fixed 6 year terms with a fixed interest rate of 2.5% per year.

The government provides Funding Circle with a full, 100% guarantee of the loan. This guarantee potentially enables Funding Circle to lend to businesses that might not have been previously eligible for a loan, due to the effect coronavirus has had on their business. 

Please note, when taking out a BBLS loan, the business is liable for the full loan amount. If the business is unable to repay the scheme provides a guarantee to the lender, not to the business.

BBLS will also cover the first 12 months of interest payments. In addition, borrowers will not have to make any repayments for the first 12 months. This enables smaller businesses to benefit without upfront costs.

You can read more about BBLS on the British Business Bank’s website.

Is my business eligible?

The scheme is open to most businesses, regardless of turnover, who meet the eligibility requirements and were established on or before 1 March 2020.

You can apply for a Bounce Back loan if you are an existing Funding Circle borrower, and your business:

  • is based in the UK
  • has been negatively affected by coronavirus
  • is not in bankruptcy, liquidation or undergoing debt restructuring

Full details can be found here.

How do I apply for BBLS?

As BBLS is currently only being offered to our existing borrowers, you’ll need to access your Funding Circle account in order to submit your application.

Once you’ve logged in through the Funding Circle portal, you can submit your application using our online form. You’ll then be asked to sign a contract. If asked, you may also be required to submit some additional documents.

What is my liability for a BBLS loan?

  • Your business is liable for the full loan amount. The Government’s guarantee is not provided to you
  • If you miss four contractual payments (i.e 90 days late from the date of your first missed repayment) then we will need to default the loan
  • Defaulting a loan is a last resort for us, as this will adversely affect your business’s credit rating
  • We will stay in contact with you throughout this period to help you with managing the arrears and will look to explore all other available options with you before reaching this stage
  • If we do have to default the loan, then we will seek full repayment of outstanding principal and contractual interest from the business
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