Some of the smallest businesses in the economy have been given a potential lifeline: the chance to apply for up to £50,000 in 100% government-backed loans, with no interest over 12 months.

*Update 31 March 2021: In line with the government’s announcements, this scheme ended on 31st March. Starling is no longer accepting applications for CBILS loans. Starling plans to continue to support SMEs. We are currently in discussion with the BBB to offer the government’s Recovery Loan Scheme.

Update 21 December 2020: The closing date for the Bounce Back Loan Scheme (BBLS) has now been extended until 31 March 2021. You can find more information on our BBLS pages.

Update 20 May 2020: To manage high demand, we’ve opened a BBL interest list. In the first instance, we will be considering applications from established customers using Starling as their primary account.

Five weeks after lockdown, the UK government has announced yet more financial support for small and medium-sized enterprises (SMEs) – this time in the form of emergency “Bounce Back” loans.

The Government has said that they will provide full details of the scheme on Monday 4 May. As an accredited CBILS lender, Starling is going to be offering loans under the Bounce Back Scheme. We’ll be publishing more details and a way to register for this scheme soon. Starling Bounce Back Loans will be available as soon as possible after 4 May.

Under the Bounce Back Loan Scheme, the Government announced that the smallest tier of companies in the UK economy will be able to borrow between £2,000 and £50,000 – capped at 25% of a business’s turnover, which would be a maximum of £200,000. The loan would be 100% guaranteed for lenders, by the Government

Chancellor of the Exchequer Rishi Sunak said the new funding, announced on 27 April, is designed to provide emergency aid for “the smallest businesses” which make up the backbone of the economy and which might not have been eligible for other financial support.

The Bounce Back Loans are separate to the previously announced Coronavirus Business Interruption Loan Scheme (CBILS), which allows SMEs to apply for larger amounts, up to £5 million, and which is backed by an 80% government guarantee. The Bounce Back Loans should be quicker to access, with a promise from the Chancellor that the money should be delivered to companies 24 hours after application approval.

Updated 11 May 2020. You can now apply for a business Bounce Back Loan with Starling.

When more details about the Bounce Back loan scheme are released, we will publish an update on our site. It’s also important to keep checking the government’s website.

Am I eligible?

Sole traders, entrepreneurs and small businesses can apply. If your business meets all the following criteria you may be eligible for a loan:

  • A Starling business account holder, using us as your main account
  • Based in the UK.
  • Struggling due to coronavirus.
  • Trading as of 1 March.
  • If your business was in difficulty on 31 December 2019, you will need to self certify that you will not breach the state aid rules or restrictions on export-related activities by taking the loan.

More details on eligibility criteria can be found on our Bounce Back Loan pages.

What’s the application process?

  • If you’re a Starling business customer you can apply for a business Bounce Back Loan with us.
  • If you’re not yet a business customer, you do need to apply for a business account before applying for a Bounce Back Loan. You are required to use Starling as your main business bank account if you’re awarded a loan.

What are the terms of the loan?

  • The loans are interest-free for the first 12 months, and no repayments are due within this period.
  • They are 100% backed by the government, whereas the CBILS loans are 80% government-backed.
  • There are no arrangement fees or early repayment charges.
  • The maximum term of the loan is six years.
  • The rate of interest is fixed at 2.5% (payable after 12 months).
  • It has not yet been announced whether the government will allow non-traditional, fintech lenders to be part of the lender network.

What if I’ve already received a CBILS loan?

You cannot apply to both the CBILS and the Bounce Back Schemes.

However, if your company has received a CBILS loan of up to £50,000 this might be able to be converted into a Bounce Back Loan. You can apply to do this with your lender until 4 November 2020.

What other support is available for SMEs?

  • The Coronavirus Job Retention Scheme allows furloughed staff to receive up to 80% of their wages from the government during the crisis.
  • The government is also paying for statutory sick pay if employees are struck down with the virus.
  • Business rates have been scrapped temporarily for thousands of small firms.
  • A range of articles are available on our coronavirus help and support pages.

The above is intended as general information and does not constitute advice in any way. You should take independent advice if you have any questions about your specific circumstances.

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