Bounce Back Loans: Everything You Need to Know for Your Small Business

Small businesses make up over 90 percent of Western economies, employing millions of people every year and generating significant revenue across industries.

However, the coronavirus pandemic has changed things rapidly, especially in the UK. Many SME business owners have had no other option than to furlough employees or drastically reduce their working hours, while others have officially closed their doors, unable to gather the resources necessary to stay afloat.

To safeguard business activities across the country, UK chancellor Rishi Sunak has announced a new Bounce Back Loan scheme, through which business owners can receive some funding during the pandemic.

He said: “These loans will help [business owners] bounce back from this crisis, getting money fast. […] It’s vital this speedy progress continues in the days and weeks ahead.”

This new scheme comes after the previous emergency loan system issued by the government – the Coronavirus Business Interruption Loan Scheme (CBILS) – was met with harsh criticism, as business owners experienced technical difficulties in the application process and delays in receiving the money once their loan was approved.

Here’s everything you need to know about the scheme, including how to apply and what to use the funds for.

According to government guidelines, businesses of any size can get access the loans, however, this does not include banks, insurance companies, public sector groups and state-funded primary and secondary schools.

If your business doesn’t reside within the excluded categories, you must meet the following criteria to be eligible for the loans:

• Your activity wasn’t in financial trouble on December 31 2019
• You were trading before March 1 2020
• Over half of your income as a business owner comes from trading
• Your business has been negatively affected by lockdown measures
• Your business isn’t already bankrupt or in liquidation
• You haven’t already been approved for the CBILS, unless you intend to use Bounce Back Loans to pay back the other loan