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Bounce Back Loan Scheme (BBLS)

The Bounce Back Loan Scheme (BBLS) is now closed to new applications, including applications for Top-Ups.

BBLS applications received by 23.59 on 31 March 2021 can be processed through to 31 May 2021.​

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If you have a query about BBLS, or wish to discuss an outstanding application, please contact [email protected]

Recovery Loan Scheme​

A new debt finance programme, the Recovery Loan Scheme (RLS), was announced by the Government in the Budget on 3 March 2021. The new Scheme, which will open on 6 April 2021, aims to support businesses affected by Covid-19 as they recover and grow following the pandemic. RLS supports a maximum facility size of up to £10m with minimum facility sizes starting at £1,000 for Invoice and Asset Finance and £25,001 for Term Loans and Overdrafts.

Further information can be found at https://www.paragonbank.co.uk/recovery-loan-scheme.​

The Bounce Back Loan Scheme (BBLS) is a UK Government Guarantee Scheme established in May 2020 with the aim of assisting SMEs to access finance during the Coronavirus (COVID-19) pandemic.

The BBLS is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit british-business-bank.co.uk.

Who is the British Business Bank?

The British Business Bank is 100% Government owned but independently managed. It brings expertise and Government money to the smaller business finance markets. They don’t lend or invest directly, instead working with over 130 partners such as Paragon Bank.

Businesses apply for finance through partners who, because they work with the BBB, can lend and invest more - especially to younger and faster growing companies.

BBLS criteria

Paragon offers term loans, initially supporting its existing SME customers through the BBLS on the following basis:

  • Six-year loan with no early repayment charges
  • £2,000 up to 25% of turnover or £50,000, whichever is lower
  • Government set interest rate of 2.5% per annum
  • Interest paid by government for first 12 months*
  • No principal repayments for first 12 months**
  • No personal guarantees

*The government will make a Business Interruption Payment to cover the first 12 months of interest payments

**Borrowers will not have to begin principal repayments for the first 12 months

PLEASE NOTE: The borrower always remains 100% liable for the debt

Am I eligible to apply for the BBLS?

To be eligible for lending under the BBLS:

  • Your business must be UK-based in its business activity, and established by 1 March 2020
  • Your business has been adversely impacted by the Coronavirus (Covid-19)
  • Your business is not currently using a government-backed Coronavirus loan scheme (unless using BBLS to refinance a whole facility)
  • Your business is not in bankruptcy, liquidation or undergoing debt restructuring

The following are not eligible under the BBLS:

  • Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive)
  • Public sector bodies
  • State funded primary and secondary schools
  • Insurance companies

Additional information​

The BBLS Guarantee is provided to us and not to you. You remain responsible for repaying the whole of the loan at all times and if you fail to do so this may negatively affect your credit score or rating with credit rating agencies.

For loans provided under the Bounce Back Loan Scheme, we are expected to do the following:

  • Monitor your repayment record during the life of the loan and take appropriate action where there are signs of actual or possible repayment difficulties
  • Where we identify you as vulnerable or have reason to believe that you may be vulnerable, make appropriate adjustments to ensure your circumstances are accommodated throughout the duration of the loan
  • Upon default by you, give you a reasonable period to remedy any breach and will not treat the same as an event of default if it is remedied by you within this period
  • Not require you to pay any lender-levied fees of any description (including on default) or any default interest (except that we may continue to charge interest at 2.5% per annum if the loan is not repaid when due until such time as it is repaid)
  • Pay due regard to your information needs and provide information to you in a way which is clear, fair and not misleading
  • Provide you with the following minimum information in relation to your loan during the term of such loan:
    1. Timely, clear and adequate information that enables you to understand that, where you fail to make payments under the loan, the amount missed, what can be done to remedy, in what timescales, and the impact (if any) on future repayments
    2. Upon default by you, information about any proposed action we might take in respect of the loan, prior to taking such action
    3. Regular information about the Loan (on at least an annual basis) in the form of a statement setting out details of the payment transactions on the loan during the period since such information was provided (or if not provided previously, since drawdown of the loan) and amounts outstanding under the loan; and
    4. Information on options available to you for help and assistance, including sources of free independent advice

Please note that the above is for information purposes only and will not be deemed incorporated into the loan (nor provide you with any additional rights under it).

Additional help

The BBLS is just one of several measures announced by the Government. You can find full details of all Government support schemes available to businesses through this period of disruption here.

If you’re worried about your finances, please contact us. You can also contact the following organisations for free advice:

Business Debtline is a charity dedicated to providing free debt advice to small businesses across the UK: www.businessdebtline.org or 0800 197 6026.​

For clear, practical advice and support for issues with mental health and money, Mental Health and Money is an online service available at www.mentalhealthandmoneyadvice.org

Repaying your Bounce Back Loan

You received a payment holiday for the first year of your loan, with the interest being paid for by the Government via a Business Interruption Payment. After the first 12 months, you will need to start making monthly repayments to repay the amount you borrowed, plus interest from the date your repayment holiday ends.

We will send you a repayment schedule outlining your options, around three months before your first payment is due.

Please note you do not need to contact us in advance.

If you no longer need the loan, you can choose to pay it back early. You’ll then pay less interest. There are no early repayment charges and you won’t pay any interest if you pay the full amount before the end of your initial 12-month repayment holiday.

Or you can make a one-off repayment, as well as additional payments on a regular basis, and doing so will also help save you money on your interest payments.

Your other repayment options

Pay As You Grow

The Government has announced Pay As You Grow options for Bounce Back Loan borrowers to help businesses get back to regular trading. Pay As You Grow could give you more time and flexibility to pay back your loan.

Find out more

We’re here to help

You do not need to contact us in advance. We will send you a repayment schedule outlining your options, around three months before your first payment is due.

However if you’re worried about your finances, please contact us.

Other business finance support options

In addition, the British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551