Bounce back business loans

[Gavin John Hyde]

What's people's views on these bounce back loans from the government.
You can borrow 25 percent of your turnover.
It's backed 100% by government who pay the interest for first 12 months then it's 2.5% which is pretty good for a bank loan for a business.
Don't have to show future profitability just that you traded recently. Banks are giving them out quite willingly as its no risk to them as they are not risking there capital.
Anybody applied?
Might be tempted and then get a bigger van as its cheaper than vehicle finance...

 

[Baddegg]

Sounds win win to me mate.....government getting businesses moving again...

 

[pc1966]

If we could get one we would, but as a recent start-up we don't have a 2019 turnover to use, so not clear if future contracts can be used in place of that.

But as you say, cheaper than other finance so if there is anything your business needs now or in the immediate future, and that can be living money, then it looks the best option you can get. I suspect there is a lot of good deals on new vans to be had at this point in time!

 

[ED17]

I've done it, money should be in the bank this week. Only to be used for business purposes but no payments for the first 12 months and government pays the first years interest.

 

[pc1966]

I've done it, money should be in the bank this week. Only to be used for business purposes but no payments for the first 12 months and government pays the first years interest.

Can "business purposes" include paying salary?

 

[ED17]

Can "business purposes" include paying salary?

I would assume so as it would keep you going until you can earn some money. It can be paid back without penalties, so get it, use it if you need to or pay it back if you don't. That's how I see it.

 

[Baddegg]

I’m applying this afternoon.....as others a lot cheaper than finance and as @ED17 says if ya don’t use it give it back no penalties ?

 

[plugsandsparks]

Mine arrived today, took less than 36 hours. There are some limitations as to what you can use it for but the main purpose is working capital which includes paying yourself and other staff. Cannot remember the precise wording but there are some limitations on using it for fixed assests.
I go it purely to enable me to pay myself on time and manage my supplier base. I was a victim of Wolseleys policy of only supplying "key establishments" like hospitals supermarkets and the like. I therefore had to set up new accounts with competitors of Wolesey but they would only offer cash account, no credit...
I fully expect suppliers to tighten credit terms substantially so working capital is vital for my business.

 

[Baddegg]

FAQs: Bounce Back Loan Terms - British Business Bank

See the FAQs about bounce back loans repayment terms. Learn more about the Bounce Back Loan Scheme, bounce back loan terms and bounce back loan repayment terms.

www.british-business-bank.co.uk

words words words

 

[Gavin John Hyde]

Can "business purposes" include paying salary?

From what I have read online yes it can. Basically any legit business expense so salary. Assets etc etc
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If we could get one we would, but as a recent start-up we don't have a 2019 turnover to use, so not clear if future contracts can be used in place of that.

But as you say, cheaper than other finance so if there is anything your business needs now or in the immediate future, and that can be living money, then it looks the best option you can get. I suspect there is a lot of good deals on new vans to be had at this point in time!

As long as you were trading on 1st March you should be eligible. I did read somewhere about 2020s projected turnover rather than 2019s being used for new firms...

'Bounce back loans' – help for small businesses and income support for those missing out elsewhere, eg, limited company directors and self-employed

Small businesses can now apply for a new 100% state-backed loan worth up to £50,000, with no interest charged or repayments needed in the first 12 months

www.moneysavingexpert.com

 

[pc1966]

As long as you were trading on 1st March you should be eligible. I did read somewhere about 2020s projected turnover rather than 2019s being used for new firms...

That would be great

Our new attempt at world domination started July (I think) 2019 but so far most of our time has been sitting waiting for planning permission and just after we got that in Feb 2020 - bang COVID-19! Not even hired any minions yet

 

[Gavin John Hyde]

Well I have applied most basic of applications, name , email company name and account details,enter turnover for 2019 tick the box and wait.
Santander have a few thousand applications to work through so who knows how long it takes?
did read in the small print they dont credit check you like a normal loan as by definition the loans are designed for companies experiencing a downturn due to the virus. its like a self declaration thing.

 

[Leesparkykent]

I applied monday as soon as it was made live. Took the 50k and just going to graft with it over the next year and hand it back just before 1st payment is due. It went in the bank yesterday.

 

[Gavin John Hyde]

I applied monday as soon as it was made live. Took the 50k and just going to graft with it over the next year and hand it back just before 1st payment is due. It went in the bank yesterday.

I like your thinking Lee, 50k free cash is not to be turned down, as long as you can repay it you would be foolish not to take it and make it work for you. I know a scrap dealer who has applied and will make good use of it

 

[littlespark]

It was presented on the Martin Lewis programme last night, and I’m sorely tempted just to have a bit of cash in the bank since I’m not getting the SE scheme money.

Will wait and see what UC off next week first though