6th May 2020
The Government’s highly anticipated Bounce Back Loan Scheme (BBLS) went live this week. This is providing vital, fast financial relief for British Businesses affected by the economic impact of COVID-19. BBLS is aimed at SMEs seeking loans of up to £50,000 (minimum 2k, capped at 25% of annual turnover) and, with this relief scheme being exempt from consumer protection laws, the loans should be received within a few days of businesses applying.
On Monday, over 110,000 businesses applied for the relief funding. Despite this huge demand, the banks have reported that the majority of applications received have been processed, and the average loan size is currently estimated to be £30,000. This is almost on par with the amount handed out through CBILS in over a month since its launch.
To give a perspective on the enormity of this operation, the size of non-bank lending is around 2bn per annum and it’s estimated that through BBLS, 3.3bn will be handed out on the very first day.
The popularity of the scheme is no surprise, given that the loans are 100% guaranteed by the government, have a repayment grace period of 12 months, can be up to 6 years in term, have no arrangement fee and are capped at an interest rate of 2.5% - exactly what so many businesses require in order to help come through the pandemic.
In these unprecedented times, deploying funds to viable SMEs quickly will be integral in aiding the recovery of the market and Crowd2fund are currently in conversations with the British Business Bank regarding the matter.
The BBLS can be used by a range of businesses, including the smallest, the true future of the dynamic UK economy and it’s a fantastic form of credit, owing to its affordability and apparent speed of deployment. This is an area of the industry that has been at the heart of Crowd2Fund, since its inception.
As the landscape evolves day-by-day, we will keep you updated on our position, as we have some extremely exciting and ameliorating prospects on the near horizon.
For more information on BBLS and how to apply, please visit:
https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
