The bounce-back loan scheme has been popular with small businesses that perhaps have struggled to get much help from elsewhere. About £40bn has been lent to about half a million businesses through the schemes in just two months, but we have to remember this is ‘not free money’ as I have heard it described elsewhere!
Yes, repayment is delayed by 12 months and there is an attractive rate of interest, but the sum still has to be paid back!
Your business needs a strong financial plan in place, or it could have severe consequences in the future. When the VAT payment holiday is over and the interest and loan repayment starts, we could see the true impact of the coronavirus pandemic for British Businesses.
Adam Marshall, head of the British Chambers of Commerce, described the loan schemes as “disaster delayed but not averted”.
The good news is there is time to plan, get together with your accountant and plan how you will be paying the loan back. It’s has been a lifeline for many businesses a good opportunity to invest in your business, just use it wisely!
Have you taken out a bounce-back loan?