The Bounce Back Loan Scheme (BBLS) has been a lifeline for businesses impacted by the pandemic, and it is constantly being updated. If you didn’t utilize your full entitlement initially, you may now be able to request a top-up. Additionally, an extension to the loan term can be requested if required.
Given the compromised cash flow and significant trading disruptions experienced by businesses, the emergency funding provided by Bounce Back Loans has provided much-needed flexibility, helping many companies avoid complete insolvency.
Ways a Bounce Back Loan can aid your business
In response to the challenges posed by the COVID-19 pandemic, the UK government introduced the Bounce Back Loan Scheme (BBLS) to provide financial support to struggling businesses. This unsecured loan scheme, guaranteed by the government, offers several features that make it an attractive option for businesses impacted by the pandemic. Some of these features include:
- A low fixed interest rate for the loan term
- The option to borrow up to £50,000 or 25% of your company’s annual turnover (whichever is lower)
- A 12-month interest and repayment holiday (which can be extended for an additional six months on the capital amount)
If you are a limited company, the money obtained through BBLS belongs to your company as a separate entity. However, there may be questions regarding how you can spend this loan and whether any limitations apply.
Effective usage of your company’s Bounce Back Loan
The Bounce Back Loan Scheme (BBLS) has been a lifeline for many UK businesses hit by the pandemic. These unsecured loans, guaranteed by the government, offer a range of attractive features, including low-interest rates, no repayment for the first year, and a repayment holiday of up to six months. If you’re wondering how you can use your BBLS to support your business during this challenging time, here are a few suggestions:
Cover Staff Wages
Since payroll is often one of the most significant business expenses, the BBLS can be used to cover staff wages over the coming months.
Pay Commercial Rents
If you are struggling to pay rent due to a commercial lease, you could use your Bounce Back Loan to pay the rent arrears.
Supplier Payments
Paying supplier bills on time is essential to keep the business running smoothly. The BBLS could help you maintain your business relationships with your suppliers.
Business Rates
Business rates are a significant expense for many companies. BBLS can help you keep up with your liability, especially if you’re not eligible for business rate relief.
Utilities
Paying for essential utilities, such as heat, light, and water, with the funds from a Bounce Back Loan ensures you can run your business without undue pressure from utility companies and the water authority.
Remember that while there are no specific rules about how to use the BBLS, you must use the loan for the “economic benefit” of your business, and keep written records of how you spend the money. InsolvencySupport.co.uk can provide reliable, professional advice on the BBLS and help you decide how best to use the funds to support your business during these challenging times. Contact us for a free, same-day consultation at any of our offices throughout the UK.