In excess of 100,000 small business Bounce Back loan applications hit banks in the first 24 hours of the scheme being opened. This demonstrates the need for cash injections into the smallest companies in the country to support them and get them back to work.
With loans offered at up to 25% of your annual turnover, ranging from £2,000 to £50,000, the average loan applied for in the first day of operation settled at about £30,000. This means small business Bounce Back loan applications totted up to about £3.3 billion in a day, somewhat confirming the suspicion that Coronavirus Business Interruption Loans weren’t working for small businesses – only about £4.1 billion has been loaned under Coronavirus Business Interruption Loans up to the end of April.
While the small business Bounce Back loan application process is simple, only a few have already received the funds although it’s a good sign that the money has started to flow. The sheer volumes of those that applied in the first 24 hours means that it will take some time to process applications but the cash should be in your bank account within 24 hours of your loan being approved.
Some banks, Barclays in particular, have been criticised that their systems failed and that it was impossible to submit a small business Bounce Back loan application. The bank has said that there was no failure but they were simply deluged with applications which has resulted in some having to wait to apply.
While the small business Bounce Back loan is very easy to apply for, bear in mind that this is a loan not a grant and the funds will have to be repaid. There will be nothing to pay for a year as the government will pay the interest, but with loan periods of up to six years and an, albeit very low, interest rate of 2.5%, you should only borrow sufficient funds to see you through the pandemic and request an amount that you will be able to afford repayments on.
Once you have decided what loan amount you require, the small business Bounce Back loan application process is very simple asking only for basic business information. There will be no examination of your business by the bank (other than basic fraud checks) and they will not be examining the viability of your business and ability to repay the loan. It’s pretty much been accepted by the government that your business will have been severely disrupted and the small business Bounce Back loan is intended to help you get back on your feet, not be a barrier to a cash injection at the time you need it most.