What are the new Bounce Back loans?
- Loans are 100% guaranteed by Government
- Available from all high street Banks
- Businesses can borrow between £2,000 and £50,000
- No repayments in the first 12 months
- Interest free for the first 12 months
- Interest capped at 2.5% after that
- Loan term can be up to 6 years
Who can apply?
- Small companies, sole traders and partnerships can apply
- You need to be based in the UK
- You are negatively affected by COVID19
- You were not classed as an undertaking in difficulty* on 31 December 2019
- You can borrow up to 25% of 2019 revenue or £50,000, whichever is higher
How do I apply?
- You can apply from 4 May 2020
- You can apply through your usual online banking site
- Short and easy self-certification online application form
- Cash is available within 48 hours of your application
What info do I need to apply?
We don’t know this yet, but you will only need to prove that you were viable before the pandemic
What if I’ve already received other COVID19 grants?
The Bounce Back loans are in addition to other funding such as Business Grants, Furlough Grants, Self-Employed Grants. But bear in mind that grants don’t need to be paid back. The Bounce Back and CBILS loans do need to be repaid
How to spend the acquired money wisely?
The government’s Bounce Back Loan scheme means that any business in the UK can borrow up to £50,000, (capped at 25% of their turnover) with no interest payments and no capital repayments during that first 12 months. This means you can get a big chunk of free money into your bank account and then, after the initial 12 months, it’s repaid over a five year term at 2.5% interest – which is way lower than any small business would be able to borrow in a normal market.
This gives every business in the UK the opportunity hopefully not only to survive the pandemic slowdown but also to invest in assets that will drive the business growth.
This guide is intended to help you make the right decisions and do the right things with the monies you get from your loan and move forward. In the past, have you ever stopped yourself from getting a loan as the deals were not good enough, well now the new deal is simply difficult to resist.
For many businesses, your Bounce Back Loan could and should be used to create additional income which, in many cases, would enable you to pay it all back in full before the monthly repayments even start.
This is an important principle when it comes to investing your Bounce Back Loan:
• Invest it in things that will put money in to your bank account
• Invest it in things that will help your business to grow
• Invest it in things that will attract more customers and more sales
Almost every successful business has used borrowed money at some point to throw itself forward. They’ve taken on debt, or raised capital from shareholders, to invest in ‘income producing assets’.
The Bounce Back Loan is a chance to raise capital quickly and on good terms.
Use your new ‘capital’ to acquire tangible or intangible assets – physical things like new kit or equipment that enables you to expand or grow your capacity
or intangible things like marketing campaigns or marketing systems, new website a pieces of software that help you with inflow of customers.
This is your chance to have up to £50,000 of capital to invest in your business, completely FREE for a year.
So THINK about how you’re going to invest it to get the maximum value from it.
You don’t have to spend it all at once. It’s free money for 12 months, so it can sit in your bank account until you’ve worked out how to deploy it so it generates the best possible return for you. Get clear on where you want to be and give real thought as to what you want your business to look like one or two years from now – because then you can use your Bounce Loan to help you get there.
Replace equipment that is wearing off and the newer will work faster & better. You know your business and know what works best for you.
Commercial vehicles – By buying a new van not only to take you to jobs but to show your clients that your business is doing well. You can use it to advertise your business, this is your chance.
Get a marketing systems in place that deliver you a consistent flow of new leads and customers arriving each month.
Use your monies to get these assets and systems put in place. An example, for instance, could be a well-structured Google Ads campaign. Another asset might be a Facebook ad campaign. Different social platforms and advertising techniques or campaigns work differently for each business.
Spending it on one-off, or ad hoc things, that don’t systematically put money in your bank account month after month after month.
Get the right Customer Relationship Management. Anyone looking to build a sustainable business that will pay him or her a meaningful amount of drawings each month will need a system to look after his or her customers. That means you need a good CRM. Get other tools that will help you to attract more customers and convert more customers.
Get a Follow-Up System in place. Most businesses don’t need more leads. They just need to look after the leads they’re already getting much better in order to generate the income that they want and need. Which means that your Follow Up System is a top contender for some of the investment from your newly acquired capital.
Invest in staff. If you have no capacity to do more work – because every minute of your day is already counted for. Until you can bring in the right help. Often the smart thing is to bring in people (either part-time, full-time or out-sourced) to do your EXISTING work so that you can be freed up to focus on the stuff that brings in the money and the growth. Getting you freed up from the day-to-day tasks will be critical if you’re looking to make a stepchange in profits. What more by your newly acquired capital to employ others so that you can do the important stuff can be super-smart. Investing in staff so that you can focus your time and energy on the things that matter most to get you to where you want to be. Use that money to help you make more money. The stuff that can change your business and your life.
Get a Coach/Mentor These are unprecedented times and this is a unique, once in a lifetime opportunity for you. You don’t have to travel this path alone. Get the right coach alongside you. Working with you. Helping you to prioritise and plan. Holding you accountable to make sure you achieve the goals that matter to you. Someone who has been there and done it. Someone who will work with you one-on-one. Someone you can talk to, who’ll encourage you and support you and, when appropriate give you a kick up the bum too!
Invest in the staff training. The well trained staff who generate leads and provide sound customer service that will go long way. If you look after your staff, they will look after your customers. Most people want to grow in their rolls and need to be led and motivated. The proper training is a quick and predictable way of getting job done correctly with the right skills.
We are here to guide you and work with you. It is imperative for us at our clients grow, evolve and progress. Contact us if you are affected by the current situation and need to talk about any schemes available by the British Government.