Government Support During Covid - Bounce Back Loan Scheme

The Bounce Back Loan Scheme helps small and medium sized business to borrow between £2000 and up to 25% of their turnover.

The maximum loan amount is £50k.

This is a 100% government guaranteed loan - with no fees or interest to pay for the first 23 months - after 12 months the interest is 2.5% p/a.

To be eligible for the bounce back loan you must be;

• Based in the UK

• A business established prior to 1st March 2020.

• A business which has been adversely affected by coronavirus.

Businesses in any sector can apply, unless they are insurers (not including brokers) banks, or state funded (i,e primary schools).

If you had already received funding of up to £50k at the beginning of the COVID19 crisis you were able transfer this to a bounce back loan up until 4 November 2020.

The scheme has now been extended and applications are open until 31st March 2021. 

If you have already applied for and received a bounce back loan, but borrowed less than the amount you were entitled to, you can request a top up on your loan to the full amount - the closing date for the top up, is the 31st March 2021. 

Although there are a number of schemes set out to help business and employees, there have been a few gaps identified.

If you are a director of a limited company, then it is likely that you declare dividends rather than a salary - although this is a legal and often advised way of taking an income out of a company, it does mean that furlough would not be eligible. Many people have raised this concern with the government - after all even if the staff are on furlough, if there is no actual company to come back to, then the long term affect on the economy could be devastating.

If you are not eligible for either furlough or SEISS then you may be able to claim universal credit. However this is likely to not be even close to a liveable wage.

A group of business and advisors have recently developed the Directors Income Support Scheme (DISS), an easy to follow and implement set of parameters, created to help support company directors who have fallen through the COVID-19 support gap - the scheme has been set in front of the treasury and the government for consideration, with the hope that an official support package will be rolled out - however the next budget isn't expected until March 2021.