Update – 4th May 2020


Update 4 May 2020

Bounce Back Loan Update

What’s new?

Clarity on Rate  Loan rates to be set at 2.5%.

Repayment Terms You are able to receive the loan, hold it and if you don’t need it you can repay it back without any early repayment charges


There appears to be a conflict between security which currently says both;-

-The borrower remains 100% liable for the debt.

-Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).

-We have looked at this and believe it mean that if you default the lender will look towards claiming from the company to claw back some of this loan.

-As no security is offered, we do not believe they can make the directors personally liable (Unless it is proven fraud has taken place).

Ensure you read the small print to understand your position.

RECAP of what we already knew

What is it?

A new loan scheme for between £2,000 and £50,000 up to a maximum of 25% of turnover. The loan term can be up to six years.

What are the terms?

-Interest free for first 12 months

-No repayments due in first twelve months

-The government will guarantee 100% of this. This means no personal guarantees are required.

Are there any eligibility criteria?

Yes. You must be

-Based in the UK

-Negatively affected by COVID 19

-Loan is for business purposes

-Not an ‘undertaking in difficulty’. This means the company does not have negative reserves/negative balance sheet* that exceed 50% of issued share capital as at 31 December 2019.

*We don’t know if ‘in credit’ directors loan accounts will be added back in this instance?

Can I apply for this if I have already received a loan under CBILS?

No, you cannot but if you have a CBILS loan under £50,000 you can ask for it to be transferred into the Bounce Back scheme.

How do I apply?

You can apply on-line to one of a series of accredited lenders.

Do I need to provide detailed forecasts?

It was stated on 27 April when this was announced that banks will not require business plans or forward financials, although this is not highlighted on the government page.

When is it available?

You can apply from May 4th, 2020 and should receive the money “within days.”

Government Link  https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

British Business Bank Link            https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/

For copies of our previous updates please e-mail either



Previous updates

18 March, 19 March, 21 March,

24 March, 26 March, 27 March,

6 April,9 April, 10 April,24 April, 28 April,

This article is written for the general interest of our clients and is not a substitute for consulting the relevant legislation or taking professional advice. The authors and the firm cannot accept any responsibility for loss arising from any person acting or refraining from acting on the basis of the material included herein.

Andy Fleet

Author Andy Fleet

More posts by Andy Fleet