Do Bounce Back Loans affect GGS eligibility?
Having previously received a Bounce Back Loan does not make you ineligible for the Growth Guarantee Scheme. The BBB's published scheme rules confirm that businesses with prior BBLS facilities taken before 30 June 2024 are not prevented from accessing GGS.
However, the MFA position for BBL is not a blanket exclusion. The BBB's own GGS FAQs state that a BBL 'may count towards your cumulative aid allowance' - it depends on whether your BBLS lender informed you at the time that the loan was provided under the EU de minimis Regulations. You should confirm your specific position with your lender before applying. Do not assume your full £315,000 MFA allowance is unaffected without checking.
Do CBILS loans affect GGS eligibility?
CBILS (Coronavirus Business Interruption Loan Scheme) facilities do not count toward the GGS cumulative subsidy limit, as confirmed in the BBB's published GGS FAQs. This applies to CBILS facilities taken before 30 June 2022 - the cutoff date the BBB uses for the MFA calculation. Since CBILS closed in April 2021, virtually all CBILS borrowers are covered by this rule.
A business with an outstanding CBILS balance can apply for GGS - the BBB confirms that prior CBILS facilities taken before 30 June 2024 do not prevent GGS access. The CBILS balance will not reduce your MFA allowance, though lenders will still consider your total debt position when assessing serviceability. A large CBILS balance may affect how much they are willing to advance.
The credit profile impact of Covid loans
While CBILS loans generally do not affect your MFA position (and BBL may or may not, depending on your specific notification), Covid loans can still influence a lender's credit assessment in other ways. If you have an outstanding BBL or CBILS balance that represents a significant proportion of your annual turnover, lenders will factor this into their serviceability calculations.
Payment history on Covid loans also matters. If you have made consistent on-time repayments on your BBL or CBILS facility, this can actually work in your favour by demonstrating responsible credit management. Conversely, a history of missed payments, deferrals, or restructuring can raise questions with GGS lenders.
- Outstanding BBL or CBILS balances count toward your total debt load for serviceability purposes
- Consistent repayment history on Covid loans demonstrates responsible borrowing
- Payment deferrals or restructuring on Covid loans may be flagged by lenders
- If your BBL is fully repaid, it will not affect serviceability calculations
- Some lenders view recently repaid Covid facilities positively as evidence of financial recovery
Businesses struggling to repay Covid loans
Some businesses that took Bounce Back Loans are still experiencing difficulty with repayments. If this applies to you, it is important to understand that the Pay As You Grow (PAYG) options offered by BBL lenders, including extended terms up to 10 years, interest-only periods, and repayment holidays, are separate from and do not interfere with GGS applications.
If your business is in a PAYG arrangement on its BBL, this may be viewed by some GGS lenders as an indicator of financial stress. However, many lenders take a contextual view, particularly where the BBL difficulties were clearly pandemic-related and the business has since recovered.
CLBILS and the GGS
CLBILS (Coronavirus Large Business Interruption Loan Scheme) was available to larger businesses with turnover above £45 million. Most businesses that accessed CLBILS will fall outside the GGS's £45 million turnover cap. CLBILS facilities taken before 30 June 2022 do not count toward the GGS cumulative subsidy limit - the same rule that applies to CBILS. Note that BBL is treated differently: a BBL may or may not count depending on how your lender notified you at the time.
Frequently Asked Questions
Can I apply for GGS if I still have an outstanding Bounce Back Loan?
Yes. An outstanding BBL does not affect your GGS eligibility. However, it may affect your MFA position - whether it counts toward your cumulative subsidy allowance depends on how your BBLS lender notified you at the time. Lenders will also factor your outstanding BBL balance into their affordability assessment.
Can I use GGS funds to repay my Bounce Back Loan?
Yes, this is permitted. The BBB's published GGS FAQs confirm that existing BBLS borrowers can refinance under GGS, subject to meeting eligibility criteria and the lender's own criteria. The refinancing is treated as a new GGS application. Borrower protections and scheme terms differ between BBL and GGS, so discuss the implications with your lender before proceeding.
I took the maximum £50,000 BBL. How much GGS could I access?
The BBL does not reduce your GGS MFA allowance. Depending on the MFA-equivalent value of the GGS facility and whether you have received any other MFA-qualifying support, you may be able to access a GGS facility of up to the scheme maximum of £2 million, subject to lender credit assessment.
Will lenders know I had a BBL when I apply for GGS?
Yes. Business credit reports show existing and previous credit facilities. Lenders will see your BBL or CBILS on your credit file. This is not in itself a negative signal, but unexplained gaps or irregularities in repayment history may prompt questions.
Does a CBILS write-off affect my ability to get GGS funding?
A CBILS write-off (where the government paid out on the guarantee after your business defaulted) is likely to appear on your business credit file and could make it significantly harder to access GGS or any other commercial funding. This is one of the most serious credit events a business can experience and will require a specialist broker to navigate.