As the COVID-19 crisis rumbles on, the UK government is continuing to take steps to support individuals and businesses during this trying time. As well as extending the furlough scheme and providing help for the self-employed, the Chancellor of the Exchequer unveiled new funding for SMEs on 27th April. This Bounce Back Loan Scheme provides emergency aid to the country’s small businesses. Starling is one of the banks offering the government-backed loans, and it’s incredibly easy to apply for one with them. We explore the full details.
What is the Bounce Back Loan Scheme?
In these unprecedented times, businesses of all sizes are struggling. There’s so much uncertainty surrounding when any semblance of normality will return. The Bounce Back Loan Scheme (BBLS) was introduced to help small and medium-sized enterprises steady the ship in the meantime.
The scheme allows the smallest tier of UK businesses to borrow money equivalent to up to 25% of their turnover. There is a cap for turnovers, with a maximum of £200,000. This means that businesses can borrow between £2,000 and £50,000 with an interest rate of 2.5%.
These loans, interest-free for 12 months, are 100% guaranteed for lenders by the government. They’re also different from the previously announced Coronavirus Business Interruption Loan Scheme (CBILS). The latter gives SMEs the option of applying for up to £5 million, which is 80% backed by a government guarantee.
Am I eligible?
There are a few stipulations regarding which businesses can apply. First of all, the scheme is for sole traders, entrepreneurs, and small businesses. You’ll also have to meet the following requirements to apply for a Bounce Back Loan with Starling:
Be a UK-based Starling business account holder. This account needs to be your main one.
Have had your business impacted by coronavirus.
Have been trading as of 1st March
Not be using other government loan schemes related to the pandemic. This includes CBILS, CLBILS or CCFF.
Not be bankrupt or going through debt restructuring. If your business was in difficulty on 31st December 2019, you must prove that you won’t breach state aid rules.
How can I apply with Starling?
Starling has done a good job of making the loan application process as painless as possible. There are a few documents you’ll need for the process, depending on your situation:
An activated Starling business bank card and a valid email address.
If you’re a limited company/partnership, you’ll also need to add all persons with significant control to your Starling account.
If you’re a sole trader who started trading on or before 5th April 2019, you’ll need your 2018/2019 Tax return including the SA100. You’ll also need your 2018/2019 Tax calculation (SA302). This can be found on your government gateway account.
If you started trading between 6th April 2019 and 1st March 2020, you’ll need your VAT number if you’re VAT registered. If not, you’ll need your 2019/2020 tax return (SA100) AND your 2019/2020 tax calculation (SA302).
Once you have all of your documents ready, the rest of the process is pretty straightforward:
Log into your Starling account and complete a BBLS application form. Starling recommends using a desktop browser for this step.
Upload the documents required to support your application.
Sign and submit your application. If it’s accepted, you’ll then have to review and sign your contract and offer letter.
Once your contract is signed, the money will be transferred to your Starling account.