COVID-19: Bounce Back Loan Scheme now open, claiming Self Employment Income Support and other top-up grants
5th May 2020
Mark Neath See profile
From Monday 4 May the Bounce Back Loan Scheme (BBLS) has been made available through a number of accredited lenders across the UK.
Guidance notes (along with a link to an up-to-date list of approved lenders) are available on the British Business Bank website. Click here for details.
Applicants should approach their existing lender themselves as the scheme is available only to most banks’ existing customers. Applications should be made directly via the lender’s website. You will need to fill in a short application form online, which self-certifies that your business is eligible for a loan under the BBLS.
UK banks reportedly received 110,000 applications for new loans on the first day of the scheme. Prospective applicants may wish to speak to their adviser over affordability. UK Finance (which represents banks) has said that SMEs should ‘think very carefully before taking on new debt.’
Indeed, Old Mill’s Head of Corporate Finance, Mark Neath, has calculated that assuming a business borrows the full £50,000 available over a maximum six year period then, at the 2.5% interest rate, the repayments will be £887 per month starting this time next year… that’s over £10,000 per annum.
Mark says ‘This should not be considered to be ‘free money’ since it does have to be repaid; and as with any type of borrowing, businesses should look at the affordability of the repayments. That said, it’s very cheap money at 2.5% which works out as £3,205 of interest over the life of the loan; and with the simplified application process, probably the easiest borrowing you can find.’
HMRC has announced that the claim portal for the Self-Employment Income Support Scheme will open from Monday 13 May, earlier than previously hoped, and that it will begin contacting customers this week who may be eligible. You can check your eligibility here using your Unique Taxpayer Reference (UTR) and National Insurance Number.
- Your Unique Taxpayer Reference (UTR) – your UTR can be found on the top right hand corner of any recent HMRC paperwork you have received
- Your National Insurance Number – your NI Number can be found on your payslips, P60 or letters about tax, pensions and benefits.
NB: HMRC has also announced that self-employed individuals can’t ask their accountant to make a claim on their behalf. In order to make a claim, individuals will need to have a Government Gateway account set up. This may cause a delay as registration details are sent to you when you apply, therefore we recommend ensuring registration for the Gateway is done this week if necessary.
A top-up discretionary fund worth over £600m has been set up to accommodate certain small businesses of under 50 employees who were previously outside the scope of the business grants funds scheme. Click here for details.