Banks have been inundated with applications after the government introduced their Bounce Back Loans for the first time today (4 May) to help businesses during the coronavirus pandemic.
HSBC has received 12,830 applications so far today, with Barclays saying they received 200 applications in one minute.
Bounce Back Loans allow businesses to claim up to £50,000 to help lessen the impact of the coronavirus lockdown.
So just how does a Bounce Back Loan work and who can claim one?
Here is everything you need to know:
What is a Bounce Back Loan and who can apply?
A Bounce Back loan is a government-funded initiative to help banks offer loans of up to £50,000 during the pandemic.
The scheme is aimed at small businesses with less than ten employees although anyone can apply.
You can apply for a loan if your business:
- Is based in the UK
- Has been negatively hit by the coronavirus crisis
- Was not “undertaking difficulty” on December 31, 2019.
You can't apply for a Bounce Back Loan if you fall into any of these categories:
- Banks, insurers and reinsurers, excluding insurance brokers
- Public-sector bodies
- State-funded primary and secondary schools
You also can't apply if you have already applied to the Coronavirus Business Interruption Loan Scheme.
When will I receive the money?
According to The Treasury, money should be available "within days"
Businesses can apply through their usual bank which they have a registered business account with.
The loans on offer range from £2,000 to £50,000.
How much will I owe?
If you apply for a Bounce Back loan, you could owe anything from £2,000 and £50,000 at a flat rate of 2.5 percent.
The Government will pay out 100 percent of the loan and you won't be expected to pay any interest for the first 12 months.
Loan terms last up to six years and you won't be expected to pay anything in the firs 12 months.
Loan terms will be up to six years, but no repayments will be due during the first 12 months.
Where can I apply for the loan?
You can apply for the loan through any of the 50 British Banks accredited by the financial institution to provide Bounce Back Loans.
You will be required to fill out an online application and fill in details about your business and income.
You can apply for a Bounce Back Loan here.
