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New ‘Bounce Back Loan’ announced

Client Support
Mark Brooks
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Yesterday, in response to feedback on the Coronavirus business Interruption Loan Scheme (CBILS) the Chancellor, Rishi Sunak, announced further support for business referring to a new ‘Bounce Back Loan’.

Our recent article on the Coronavirus Business Interruption Loan Scheme outlined the existing CBILS scheme and how this would benefit business.

Since CBILS was announced it has been clear that there have been problems with the scheme and that businesses in vital need of a financial lifeline have struggled to access funds via the scheme. This has broadly been for two reasons; firstly, the speed in which the approved funders have been able to approve and issue the loans and secondly, the funders require information to be able to provide their credit teams that ensures the borrower has met the criteria.

Given these challenges, the newly announced ‘Bounce Back’ Loan now provides 100% government protection meaning that in theory the funders carry no credit risk for the facility provided. It is hoped that this will unlock the system, not only speeding up the small businesses ability to obtain the required funding more quickly, but by removing the smaller applications from the system and allowing funders to concentrate on the larger loans.

The new ‘Bounce Back Loan’ details have not yet been formally announced but information released at the time of writing is as follows;

- Businesses can apply for a loan of between £2-50k
- The loan can be up to 25% of turnover, capped at £50k
- Unlike CBILS, this loan is 100% Government backed (CBILS is 80% backed)
- The loan is interest and capital free for 12 months and the loan term is up to 6 years 
- There isn’t yet any confirmation of who will provide this loan, however it has now been confirmed that the interest rate will be 2.5% after 12 months
- The application process should be a ‘quick on-line two page form’
- The ‘scheme’ should be operational from 4 May

If your business has been impacted by Covid-19 but you have been managing through historic cash reserves to date, this scheme might be appropriate for assisting with replacing any lost working capital. There is a 3-month draw down period and funds could theoretically be repaid within 12 months if eventually not needed. Careful consideration is required at this stage though, as it is key the funds are used for appropriate purposes and not just to prop up unnecessary personal drawing levels.

It is also important to ensure you make your application through the correct ‘stream’ as this will help to speed up the process of getting funds into your business. The Team at Rickard Luckin are keeping up to date in regard to how our clients access funding and the best routes for this. For larger applications not applicable for the new ‘Bounce Back’ loans, it remains the case that getting the loan application ‘right’ first time is vitally important to being able to access funds as soon as possible.

Accordingly, Rickard Luckin are offering all businesses support with applications that may need to be made, split into two stages;

1. Specific support from our Business Services Team in compiling the detailed financial information required with the CBILS applications.

2. Specific support from our Corporate Finance Team with the application process itself (leveraging their contacts at the relevant funders to keep updated on the latest feedback from their credit panels).

As ever, we are here to support our clients through these challenging times and are closely monitoring the situation so we can best advise our clients. If your business is in need of financial assistance then please do liaise with your regular Rickard Luckin contact who will be able to help and advice on the most appropriate route to raising finance.

The governments official announcement with further details can he found here .

For the latest ongoing information and guidance, you can also view our new client support page at

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