Carl Taylor Senior Consultant

The Bounce Back Loan and Coronavirus Business Interruption Loan Scheme (CBILS) are designed to support UK businesses that are seeing a reduction in revenue and disrupted cashflow as a result of the Covid-19 pandemic. 

But which of these government support schemes are right for your business? To help you make an informed decision, we’ve pulled together some information on both… 

Key features of the schemes Bounce Back Loans Coronavirus Business Interruption Loan Scheme (CBILS)
Who is this for? Intended for small businesses impacted by Covid-19, needing simple and quick access to finance. Businesses with an annual turnover of no more than £45 million.
Amount of funding available Loans range from £2,000 up to 25% of a business’ turnover. The maximum loan amount is £50,000. The maximum value of a facility provided under the scheme is £5 million, available on repayment terms of up to six years.
Repayment term The length of the loan is six years, but early repayment is allowed, without early repayment fees. For term loans and asset finance facilities: up to six years.  For overdrafts and invoice finance facilities: up to three years.
Interest and fees Government pays interest and fees for 12 months.  Interest rate is set at 2.5% per annum. Government pays interest and fees for 12 months.
Repayments in first 12 months The borrower does not have to make any repayments for the first 12 months. This depends on the lender – some are offering capital repayment holidays for the first period of the loan.
Security Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle).

No personal guarantees for facilities under £250,000. Personal guarantees may still be required, at a lender’s discretion, for facilities above £250,000.

Which one to go for?*

It’s really a question of looking at what level of finance you’re going to need to see you through.  We’d recommend running a cashflow forecast for the next 12 months, testing out different worse case and best case scenarios to assess what level of finance you are likely to need to maintain liquidity.  

If you’re going to need more than £50,000, you’ll need to look at applying for a CBILs, otherwise apply for a Bounce Back Loan, subject to you meeting the eligibility criteria.  


You can apply for a Bounce Back Loan or a CBILS if your business is based in the UK and has been negatively affected by coronavirus.

If you wish to apply for CBILS and want to borrow more that £30,000 you will need to confirm your business was not classed as a ‘business in difficulty’ on 31st December 2019. If you wish to apply for a Bounce Back Loan and your business was classed as a ‘business in difficulty on 31st December 2019, you’ll need to confirm that you’re complying with additional state aid restrictions.

Businesses from any sector can apply for either scheme, except banks, insurers and reinsurers (but not insurance brokers), public-sector bodies and state-funded primary and secondary schools.

You cannot apply for a Bounce Back Loan if you are already claiming under CBILS. However, if you have already received a loan of up to £50,000 under CBILS and want to transfer it into the Bounce Bank Loan Scheme, you can arrange this with your lender until 4th November 2020. And if you’re seeking less than £50,000 today but concerned you will need to borrow more in future, it may be possible to convert a Bounce Back Loan into CBILS at a later stage.

How to apply 

Bounce Back Loan

There are now 18 lenders participating in the scheme including many of the main retail banks. You should approach a suitable lender yourself via the lender’s website.

The lender will ask you to fill in a short online application form and self-declare that you are eligible.
The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

Coronavirus Business Interruption Loan Scheme (CBILS)

There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.
You’ll need to tell the lender the amount you’d like to borrow, what the money is for and how long you’d like to pay it back.

You’ll need to provide documents that show you can afford to repay the loan. These may include, but can vary dependent on lender: management accounts, your cash flow forecast, business plan, historic accounts and details of your business assets.

Still unsure which scheme is right for you?

We’d be happy to help. Click here to book a free Covid-19 Consultation Call.

*This article is not intended to provide financial or investment advice. Before proceeding with any loan we recommend that you obtain independent financial advice from an FCA authorised provider.