ANNOUNCEMENT 27 Apr 2020

On 27 April 2020, the government of the United Kingdom announced the Bounce Back Loan Scheme (BBLS) for small businesses affected by the Coronavirus outbreak.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

UK Department for Business, Energy & Industrial Strategy, Business Finance and Support, Guidance, “Apply for a Coronavirus Bounce Back Loan Scheme”. Available at: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan

British Business Bank, State-owned bank of UK, “The Bounce Back Loan Scheme (BBLS) is a new scheme designed to enable businesses to access finance more quickly during the coronavirus outbreak.”. Available at: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/

HM Treasury, Business and Industry, Collection, “HM Treasury coronavirus (COVID-19) business loan scheme statistics”. Available at: https://www.gov.uk/government/collections/hm-treasury-coronavirus-covid-19-business-loan-scheme-statistics

British Business Bank, State-owned bank of UK, News, "Coronavirus loan schemes and the Future Fund extended to 30 November 2020". Available at: https://www.british-business-bank.co.uk/coronavirus-loan-schemes-and-the-future-fund-extended-to-30-november-2020/

Inception date: 27 Apr 2020 | Removal date: 31 Mar 2021

Loan guarantee

On 27 April 2020, the government of the United Kingdom announced the Bounce Back Loan Scheme (BBLS) for small businesses affected by the Coronavirus outbreak. Under the BBLS, the UK government provides guarantee on commercial loans. The BBLS aims to support smaller businesses to access finance more quickly during the coronavirus outbreak. The BBLS provides financial support to small businesses “that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak”.

The maximum amount available through BBLS per business is GBP 50 thousand (USD 62.1 thousand). The government guarantees 100% of the financing against the outstanding balance of the facility (both capital and interest). The borrower is fully liable for repaying the debt. The term of the loan is 6 years and all UK-based businesses from any sector can apply to the scheme.

Under BBLS, the UK government also provides interest payment subsidy, for details please see related intervention.

The BBLS scheme will be effective until 4 November 2020.

On 14 July 2020, the Treasury of the UK announced the latest statistics concerning the BBLS. According to the announcement as of 12 July 2020, a total of GBP 31.7 billion (USD 39.38 billion) of facilities has been approved under the BBLS.

On 24 September, the UK government announced that the BBLS is extended until 30 November 2020.

On 2 November 2020, the scheme is extended to January 31, 2021.

On 18 December 2020, the scheme is extended until 31 March 2021. 

 

AFFECTED SECTORS

 
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Inception date: 27 Apr 2020 | Removal date: 31 Mar 2021

Interest payment subsidy

On 27 April 2020, the UK government announced introducing the Bounce Back Loan Scheme (BBLS) for small businesses affected by the Coronavirus outbreak.

Under the BBLS, the UK government provides loan guarantee and interest payment subsidy. For the loan guarantee please see related intervention. With respect to the interest payment subsidy, the UK government makes a Business Interruption Payment to cover the first 12 months of interest payments of the commercial loans. After 12 months, a 2.5 percent interest rate will be applied.  

The BBLS scheme will be effective until 4 November 2020.

On 24 September, the UK government announced that the BBLS is extended until 30 November 2020.

On 2 November 2020, the scheme is extended to January 31, 2021.

On 18 December 2020, the scheme is extended until 31 March 2021. 

 
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