Construction businesses can now apply to top up their Bounce Back Loan (BBL) if they originally borrowed less than the maximum amount they are entitled to, it has been confirmed.
The extended scheme, which went live this month, came in response to the second national lockdown.
According to the scheme details, the BBL top-up initiative – which is only available from the borrower’s existing BBL provider – will enable a business to apply for a larger loan that is the lesser of £50,000 or 25 per cent of annual turnover (at the time of their first application), minus the value of their original loan.
For example, a borrower with an annual turnover of £100,000 who originally applied for a £20,000 loan can apply for a maximum top-up of £5,000.
Businesses should also note that only one top-up per customer is allowed and the minimum top-up amount is £1,000.
The capital repayment holiday will continue to run from the date of the original bounce back loan drawdown date, rather than the drawdown date of the top-up.
The most recent figures revealed that the Government’s emergency coronavirus finance schemes have, so far, delivered more than £62 billion in support.
This includes 1,336,320 Bounce Back Loans worth £40.2 billion, 73,094 loans worth £17.2 billion through the Coronavirus Business Interruption Loan Scheme (CBILS) and 623 loans worth £4.6 billion through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Adam Davis, a Partner with Palmers and Head of the Construction team, said: “This will be welcome news for many construction businesses, particularly those who are struggling with cashflow issues, due to late payments or supply chain disruption.
“Palmers provides a range of debt recovery service for construction businesses affected by late payments. We also offer a fixed-fee adjudication scheme that is straightforward, effective and can help your business deal with its invoice debts quickly and efficiently.”
For more information about how Palmers can help, or to find out more about our Debt Recovery and Fixed-Fee Adjudication Scheme, please contact us.