Bounce Back Loan
Bounce Back Loans were designed for rapid distribution. The application process was deliberately light — a self-certification declaration of eligibility — and approvals were typically completed within 24 to 48 hours. The Government guaranteed 100 per cent of the loan to the lender, which is why the headline rate was just 2.5 per cent fixed for the six-year term, extendable in some cases to ten years under the Pay As You Grow framework.
BBLS is now closed to new applications. Existing BBLS borrowers are still working through repayment, and many UK SME lenders consider an active BBLS balance when underwriting new facilities, particularly because BBLS appears as Government-backed debt on the company's credit file and counts towards existing financial commitments. A BBLS in arrears is a significant red flag for new finance applications.
Some borrowers have refinanced or restructured their BBLS using Pay As You Grow options — taking a six-month payment holiday, extending the term to ten years, or moving to interest-only for up to six months at a time. These options reset the repayment profile but do not remove the underlying debt.
Worked example
How the numbers play out
A retailer borrowed the maximum £50,000 BBLS in 2020 at 2.5 per cent fixed over six years. By 2026 the balance stands at around £15,000. When applying for a new asset finance facility, the BBLS shows as an existing commitment of around £900 a month, which the lender factors into affordability calculations.
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