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Can I top up my bounce back loan and borrow more?

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Updated: 23rd February 2021

Accessing a Bounce Back Loan funding top-up

The Bounce Back Loan Scheme (BBLS) has helped many businesses in the UK to deal with enormous cash flow pressures caused by coronavirus related restrictions on trade. National lockdowns and local restrictions continue to create huge uncertainty for business owners, but if you already have a Bounce Back Loan and your business is still struggling, you may be eligible for a top-up.

The ability to top-up your Bounce Back Loan depends on the amount you originally borrowed. In total, you can only borrow the lower amount of, up to 25% of your annual business turnover or £50,000.

What are Bounce Back Loans?

Bounce Back Loans offer a low interest rate that is fixed at 2.5% for the loan term. They are also fully backed by the government, which encourages lenders to support businesses in extreme financial difficulty due to Covid-19.

A source of emergency finance in these unprecedented circumstances, Bounce Back Loans have boosted cash flow for businesses industry-wide, but the continued threat of financial decline has caused the Chancellor to add a top-up feature to the scheme. 

So how do Bounce Back Loan top-ups work, and could you be eligible to borrow more?

How do Bounce Back Loan top-ups work?

The rules regarding Bounce Back Loan top-ups include:

  • Only one top-up can be granted
  • The minimum amount of top-up is £1,000
  • You can only apply to your existing lender to borrow more
  • The 12-month repayment holiday runs from the date of the original loan, not from the top-up date
  • As is the case with the original loan, you must use the top-up for the economic benefit of the business, not for personal purposes
  • If you’re eligible, you can apply for a top-up even if your business has started making repayments to the existing loan

Some businesses may have repaid their Bounce Back Loan, and if this is the case for you, you won’t be able to borrow more under the scheme. If you’re unsure whether your business is eligible for a top-up on your Bounce Back Loan, or you need support in making your application, Real Business Rescue can help.

Can you get a top-up for your Bounce Back Loan?

When you took out your Bounce Back Loan you may not have used your full entitlement, in which case you could be eligible for a top-up. You can borrow up to the lower of £50,000 or 25% of your annual turnover, so there may be scope for further borrowing.

The Bounce Bounce Loan Scheme required you to self-certify your annual business turnover so if you did not use up your full entitlement, borrowing more could help the business survive until the effects of the pandemic subside.

Applying for a Bounce Back Loan top-up

If you decide to apply for a top-up on your Bounce Back Loan you should get in touch with your lender. They will send you a short application form on which you can detail the further amount you want to borrow.

You will also need to reconfirm the declarations you made on your first application form – these relate to your general eligibility under the scheme.

For more information on Bounce Back Loan top-ups and whether you are eligible to borrow more, please contact our team of experts at Real Business Rescue. We provide reliable unbiased advice, and can provide the reassurance you need in this challenging trading environment. We also offer free, same-day consultations to quickly assess your suitability for a BBLS top-up, and operate an extensive network of offices throughout the UK.

Keith Tully

Partner

0800 644 6080

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