Government announces ‘bounce back loans’

Discussion in 'COVID-19 Forum' started by Mark T Jones, Apr 27, 2020.

  1. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    4,854 1,852
    new loan scheme announced this afternoon, which should be perfect for smaller businesses

    - upto £50k
    - upto 25% of tunever
    - no ‘forward plan’ criteria
    - 24 hour turnaround
    - 100% government guarantee

    Can’t see any cause for complaint there!
     
    Posted: Apr 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #1
  2. Opinion87

    Opinion87 UKBF Regular Free Member

    553 163
    Last edited: Apr 27, 2020
    Posted: Apr 27, 2020 By: Opinion87 Member since: Jul 1, 2015
    #2
  3. UKSBD

    UKSBD Not a real duck Staff Member

    10,174 1,995

    Interest rate?
     
    Posted: Apr 27, 2020 By: UKSBD Member since: Dec 30, 2005
    #3
  4. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    6,179 2,038
    Interest free for the first 12 months
     
    Posted: Apr 27, 2020 By: Ian J Member since: Nov 6, 2004
    #4
  5. johndon68

    johndon68 UKBF Big Shot Full Member - Verified Business

    3,439 632
    Posted: Apr 27, 2020 By: johndon68 Member since: Nov 2, 2009
    #5
  6. JamieM

    JamieM UKBF Ace Free Member

    2,312 348
    Looks promising. Where did you get the 25% of turnover detail?
     
    Posted: Apr 27, 2020 By: JamieM Member since: Mar 22, 2006
    #6
  7. UKSBD

    UKSBD Not a real duck Staff Member

    10,174 1,995
    It says the Government will pay the interest for the 1st 12 months, not that it is interest free.

    That could mean the business still has to pay the interest, do we know yet what the interest rate will be if that is the case?
     
    Posted: Apr 27, 2020 By: UKSBD Member since: Dec 30, 2005
    #7
  8. UKSBD

    UKSBD Not a real duck Staff Member

    10,174 1,995
    Posted: Apr 27, 2020 By: UKSBD Member since: Dec 30, 2005
    #8
  9. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    4,854 1,852
    Hopefully high enough for borrowers to take it seriously:)
     
    Posted: Apr 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #9
  10. The Soup Dragon

    The Soup Dragon UKBF Regular Free Member

    168 5
    Exactly what we were looking for, is this via the same CBIL lenders?
     
    Posted: Apr 27, 2020 By: The Soup Dragon Member since: May 13, 2013
    #10
  11. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    Seems so. Some details are sketchy, but launch is 4th may
     
    Posted: Apr 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #11
  12. The Soup Dragon

    The Soup Dragon UKBF Regular Free Member

    168 5
    Well lets keep fingers crossed on the interest rate
     
    Posted: Apr 27, 2020 By: The Soup Dragon Member since: May 13, 2013
    #12
  13. Red Wood

    Red Wood UKBF Regular Free Member

    479 52
    £50K, shame they didn't increase that level to 25% >£100K, seems like a more reasonable upper limit for smaller businesses.
     
    Posted: Apr 27, 2020 By: Red Wood Member since: Jan 14, 2014
    #13
  14. John_V85

    John_V85 UKBF Contributor Free Member

    36 3
    This is going to be the lifeline needed for a lot of responsible companies, but I can't help thinking that there is also going to be a significant level of default, if not outright abuse, ultimately underwritten by the general taxpayer. The banks, presumably taking a fee (would be interested to know?) will now just shovel it out the door as fast as possible, including to those businesses who weren't going concerns before coronavirus.
     
    Posted: Apr 27, 2020 By: John_V85 Member since: Jan 11, 2019
    #14
  15. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    there isn’t a perfect solution but I’d say this is as close as it gets


    Default will be horrendous. And there will be abuse. That’s just the way it is. .
     
    Posted: Apr 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #15
  16. Red Wood

    Red Wood UKBF Regular Free Member

    479 52
    I agree some will take the p*ss, but for every fraudster or underserved, they'll be a genuine good biz that it will help survive and maybe even flourish.

    I was planning on a 80% backed low 6 figure sum, but it seems from everything on the internet the banks are not lending as easily as one would hope.
     
    Posted: Apr 27, 2020 By: Red Wood Member since: Jan 14, 2014
    #16
  17. Red Wood

    Red Wood UKBF Regular Free Member

    479 52
    I genuinely wonder how many defaults there will be. Maybe the actual implementation will fall short just like the 80% has done, the clue will be in the small print, this reducing the level of defaults.

    I don't think businesses without any assets, tangible or otherwise should be able to max out the total amount, there must be some common sense lending applied surely?
     
    Posted: Apr 27, 2020 By: Red Wood Member since: Jan 14, 2014
    #17
  18. John_V85

    John_V85 UKBF Contributor Free Member

    36 3
    I agree there is no perfect solution. I personally would have preferred to see massive resources thrown at assessing applicants based on very streamlined criteria. I acknowleged that's far easier said than done, but I'm sure the costs would have ended up being far lower than the cost to the taxpayer from defaults and abuse we will see from giving out cash with no come back to anyone who walks through the door.
     
    Posted: Apr 27, 2020 By: John_V85 Member since: Jan 11, 2019
    #18
  19. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

    4,854 1,852
    seriously, I doubt it. I think it’s being viewed as a slightly qualified grant.

    default will easily top 60%. I suspect it will only be available during lockdown.
     
    Posted: Apr 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #19
  20. J-Kristina

    J-Kristina UKBF Newcomer Free Member

    24 1
    My business, a software development firm, was formed on the 10th of March, managed to make rent for April but won't be able to pay for May..

    The business has three clients, two of them currently not paying their monthly retainers due to Covid-19 (travel industry).

    Would this new scheme apply in my case?

    I tried to look at the existing schemes also but seems like I don't apply for any as mine it's a 'new business'.
     
    Posted: Apr 27, 2020 By: J-Kristina Member since: Apr 27, 2020
    #20