Bounce Back Loans (BBLS) were introduced in March 2020 to help out struggling businesses. This period was the start of the first lockdown, a really tough time for a lot of business owners, particularly those who worked in sectors such as hospitality.
Essentially, the Government offered a big lump of short-term cash that could have been used to fix some glaring financial concerns or it could have been invested with a view to long-term future planning.
The loans ranged from £2,000 to £50,000. However, the amount that you could borrow was capped at 25% of your turnover from the previous year, or your estimated turnover.
Businesses that hadn’t already borrowed the full amount could also “top-up” their initial loan. The minimum amount that you could add to the initial loan was £1,000.
Bounce Back Loans were completely backed by the state and required no repayments or interest within the first 12 months. After 12 months, banks charge a fixed 2.5% annual interest on top of their initial loan.
The Bounce Back Loan Scheme has given out £ 47 billion since it came into action, helping millions of people in a time of crisis.