Bounce Back Loans

The ‘Bounce Back Loan Scheme’ is a new support scheme from the Government, adding to the existing support for small businesses affected by coronavirus.

You can borrow from £2,000 up to 25% of your annual turnover, up to a maximum of £50,000 for up to six years.

For the first 12 months, you won’t pay any interest because the Government will pay it for you. You also won’t have to make any repayments in the first 12 months. There are no fees on a Bounce Back Loan – unlike other loans, you won’t pay fees to arrange the loan, to repay it early or if your repayments are overdue.

For the rest of the term of the loans, you’ll pay interest at 2.5% per year.

Bounce Back Loans are delivered only by lenders accredited by the British Business Bank. The Government provides a 100% guarantee to lenders for all eligible Bounce Back Loans, but you remain liable for all the repayments, as well as the interest after the first year.

The Bounce Back Loan Scheme is separate from but similar to the Coronavirus Business Interruption Loan Scheme. Both loan schemes lend money to businesses via lenders accredited by the British Business Bank.

Small businesses can be eligible for both schemes but the Government launched the Bounce Back Loan Scheme to help small businesses borrow smaller amounts more quickly, and with more generous terms.

Read more from the British Business Bank: What is the difference between CBILS and the Bounce Back Loan Scheme?

If your business is already getting a Coronavirus Business Interruption Loan of more than £50,000, you’re not eligible for the Bounce Back Loan Scheme.

However, if your Business Interruption Loan is for £50,000 or less, you may take out a Bounce Back Loan and use the money to repay your Business Interruption Loan, as long as the money you get from the Bounce Back Loan is enough to pay back the other loan in full.

You may not hold both a Coronavirus Business Interruption Loan and a Bounce Back Loan.

Like all Bounce Back Loans, you won’t pay any interest for the first 12 months because the Government will pay it for you.

After that, the interest rate is fixed at 2.5% p.a.

The maximum you can borrow as a Bounce Back Loan is 25% of your annual turnover in 2019, up to a maximum of £50,000.

If you need more than this, you could apply for a Coronavirus Business Interruption Loan.

Remember, you may only hold one Bounce Back Loan, and with only one lender, and you aren’t allowed to have both a Coronavirus Business Interruption Loan and a Bounce Back Loan.

You’re eligible for a Bounce Back Loan if your business:

• is based in the UK
• was established on or before 1 March 2020
• has been negatively affected by coronavirus
• earns 50% or more of its income from trading
• will use the loan money as working capital or to invest in your business

If your business was an ‘undertaking in difficulty’…
You’re eligible if you certify that taking out a Bounce Back Loan won’t breach state aid rules and that you won’t use the loan for export-related activities.

• If you tell us your business was an ‘undertaking in difficulty’, we’ll ask you to fill in this form about State Aid and send it to our Member Support team.
• Not sure if your business was an ‘undertaking in difficulty’? Use this questionnaire to find out.

You aren’t eligible if your business is:

• a bank, insurer or reinsurer
  (but insurance brokers are eligible)
• a public-sector body
• a state-funded primary or secondary school
• going through a bankruptcy, debt restructuring or liquidation
• receiving or has applied for a Bounce Back Loan from another lender
• already getting a loan from the Coronavirus Business Interruption Loan Scheme.
  However, you can take out a Bounce Back Loan and use the money to repay the Business Interruption Loan in full.

No. You may only hold one Bounce Back Loan, and with only one lender.

It isn’t possible to ‘top up’ a Bounce Back Loan with more money.

It depends. Government rules state that you may only have one Bounce Back Loan.

If you’re a sole trader, this means one per person.

If you’re a Director of a limited company, this means one per limited company or group. Two or more companies form a ‘group’ when one or more are subsidiaries of another, or when your companies come under the same holding company.

If you operate as a sole trader and are also the Director of a limited company, then you may have one for your sole trader business and one for your limited company.

Your first repayment will be due in the thirteenth month after you receive the money. You’ll be able to see this in your Tide app.

You can choose to repay earlier if you wish – there’s no early repayment fee.

We’ll take the repayments automatically from the Tide account into which you received the loan money.

It doesn’t matter if you use another business account for your banking but you must make sure there’s enough money in your Tide account when your repayments are due.<

You can choose to repay earlier if you wish – there’s no early repayment fee.<

Yes, you can choose to repay all or part of the loan earlier if you wish.

There’s no early repayment fee.

If you’re concerned you won’t be able to make a repayment on your Bounce Back Loan, let us know as soon as possible by emailing: collections@tide.co We’ll talk over the options and work out a repayment plan.

We worked with a large number of financial institutions to secure funding to lend through the Bounce Back Loan Scheme.

However, the design of the Government’s Scheme doesn’t meet the requirements of our prospective funding partners to be able to provide the capital for us to lend to you.

Oliver, our CEO, has explained this in full in this letter to members.

No. Tide exists to support small businesses so when, in March, the Chancellor announced support for SMEs in the Budget, we immediately expressed our interest in becoming an accredited lender for the Coronavirus Business Interruption Loan Scheme (CBILS). We pursued this application until the Bounce Back Loan Scheme (BBLS) was announced in April. This scheme is much better suited to our members so we switched our application.

The Bounce Back Loan Scheme is a Government initiative open to all eligible small businesses. We believe it isn’t fair to discriminate against new customers so that’s why any small business owner could apply for an account with us, and if they wished, register interest in getting a Tide Bounce Back Loan.

We’ve gained some new members but in fact almost 90% of the businesses who joined our waiting list were existing rather than new members.

I’ve applied with another lender and they need proof I’m not in the application process with Tide. What can I do?
Message us by email (hello@tide.co) or in the app and we’ll be able to help.

All loans that we provided through the Bounce Back Loan Scheme were funded by us and not the Government. This means we had to raise the money we lent through the Bounce Back Loan Scheme.

The Bounce Back Loan Scheme is 100% guaranteed by the Government. ‘Guaranteed’ means that if the lender doesn’t collect the loan, then the Government has to reimburse the lender. ‘Guaranteed’ doesn’t mean the money is given to lenders by the Government.

Because the Government guarantees the loans, they need to have control over how much all accredited lenders lent to customers.

You can read more about how we tried to raise the capital to lend as Bounce Back Loans in this letter from our CEO to members.

We’re sorry you’re not happy – did you give us a chance to sort it out? Please message us in the app or by email hello@tide.co

We set out our complaints handling procedures and the rights you have to complain to the Financial Ombudsman Service in our Tide Terms.

Read more: FAQ: How do I make a complaint?