COVID - How to Apply for Small Business Loans

If your business has been affected by the Covid-19 pandemic, you might be struggling for cash. You might already be considering closing the doors on your business baby and going to find a job elsewhere. There are small business loans available. Let's have a look at the options.

Bounce Back Loans

When the pandemic hit, the government introduced the Bounce Back Loans Scheme. This is a way of allowing access to small business loans, with some plus points for the business owner, during these hard times. If your business is struggling, you can apply for a loan worth up to £50k. No interest is charged in the first 12 months and no repayments are required during that time either. It is completely backed by the government and almost 1.5 million bounce back loans have so far been issued. The deadline for applications was originally November 2020, but it has been extended twice since, to January 2021 and now until the end of March 2021.
Small Business Loans

Whilst the Bounce Back Loans Scheme is ideal because of the twelve months grace on interest and repayments, you might find yourself in a situation where you need support after the deadline for that scheme has ended. Small business loans are available from a number of different lenders, but the interest and repayments will usually be due from the first month. If you are going to apply for small business loans, shop around, look at the interest rates on offer and be sure to check out the customer service too. Sometimes knowing the experience that a fellow small business owner has had with a specific company is worth a lot more than the money you're borrowing!
Do Your Numbers

Remember, small business loans are not always the answer. They might help you out in the short term but long term, you're going to have to pay them back. A bookkeeper can help you figure out the numbers side of things and help you plan towards the future of your business. Be sensible. Don't take out a loan if it's going to be a struggle to repay. Getting yourself into more and more debt isn't the answer. The ideal right now might be to take a Bounce Back Loan and then hold onto the money should you need it. Not having to pay anything back for twelve months is perfect. It should help us all find ourselves in a better position.