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What is a Bounce Back Loan (BBLS): What is my liability?

Please note, the BBLS scheme is no longer open to new applications.

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

The Government gave providers with a full, 100% guarantee of the loan. This guarantee potentially enabled providers to lend to businesses that might not have previously been eligible for a loan, due to the effect coronavirus had on their business.

Please note, if you’ve taken out a BBLS loan, your business is liable for the full loan amount. If your business is unable to repay, the scheme provides a guarantee to the lender, not to your business.

Under the scheme, the Government covered the first 12 months of interest payments. In addition, borrowers don’t have to make any repayments for the first 12 months. This enables businesses to benefit without upfront costs.

What is my liability for a BBLS loan?

  • Your business is liable for the full loan amount. The Government’s guarantee is to the lender, not the business
  • 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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