The purpose of this blog is to provide small to medium sized businesses (SMEs) a useful summary of some of the schemes offered by the UK government to support businesses through the COVID-19 outbreak.  Specifically, here we focus on the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and Future Fund, all designed to support UK businesses that are losing revenue and seeing their cashflow disrupted as a result of the pandemic.

Bounce Back Loan Scheme (BBLS) (launched 4 May 2020 available until 4 November 2020)


  • UK-based businesses trading on 1 March 2020
  • Business has been impacted by the coronavirus and wasn’t in financial difficulty at 31 December 2019
  • More than 50% of the income of the business is derived from its trading activity
  • Not available if already have a CBILS (defined below)

Term: up to 6 years

Loan size: £2k up to 25% of their turnover (up to a maximum of £50k)

Interest: 2.5%

Other key features:

  • Interest free for the first 12 months
  • Lenders not permitted to charge any fees
  • Borrowing business remains 100% liable for the debt
  • Loans 100% government backed
  • Lenders are not permitted to take personal guarantees or take recovery action over a borrower’s personal assets (such as their main home or personal vehicle)

Coronavirus Business Interruption Loan Scheme (CBILS)


  • Be UK-based in its business activity
  • Annual turnover of up to £45 million
  • Need to show that (i) your business would have been viable if not for the pandemic and (ii) has been adversely impacted by the coronavirus
  • If you want £30k or more, need to confirm that your business wasn’t already in financial difficulty on 31 December 2019


  • Up to 3 years for overdrafts and invoice finance facilities
  • Up to 6 years for loans and asset finance facilities

Loan size: up to £5million.

Interest: commercial rates

Other key features:

  • Interest free for the first 12 months
  • Banks have agreed that they will not require personal guarantees for loans less than £250k and that they cannot require security over any person’s principal residence
  • Borrowing business remain 100% liable for the debt
  • Loans 80% government backed

Future Fund (launched 20 May 2020; open until end of September 2020)

Eligibility: Available to UK companies that meet certain criteria, including:

  • Must have raised £250k in equity from third-party investors over the last 5 years
  • Only available to ultimate parent companies, which must be UK incorporated
  • Either half or more employees are UK based; or half or more revenues are from UK sales

Term: 36 months

Loan size: Convertible loans between £125k and £5 million

Matching funding: this is an investor-led scheme (i.e. the investor(s) needs to make the application, not the business) and subject to at least equal matching from private investors.  Investor(s) must meet certain criteria (broadly, must be high net worth, professional or sophisticated investors).

Use of proceeds: working capital purposes only

Conversion: The loans will convert into shares in the company in certain circumstances, including an exit of a new funding round.  More specifically:

  • Automatically convert into equity on qualifying funding at 20% discount
  • On non-qualifying, holders of a majority of the principal amount held by the matched investors, will convert at 20% discount
  • “Qualifying” – an amount equal to the aggregate amount of the bridging loan
  • On a sale or IPO, the loan shall either convert into equity at the 20% discount (to the price set by the most recent non-qualifying round) or repaid with a redemption premium (being 100% of the  loan), whichever will provide the higher amount for the lenders
  • On maturity, the loan shall, at the option of investors, be repaid with a redemption premium (being 100% of the loan) or convert into equity at the 20% discount; provided that the government’s loan shall convert unless it requests repayment
  • On a sale or IPO or maturity of the loan, the 20% discount shall not apply to the most recent non-qualifying funding round where such round took place prior to the issuance of the bridge funding – in such circumstances, the conversion price shall not include the discount
  • On conversion, only the principal under the bridge funding (and not any accrued interest) shall convert at the discount and any accrued interest not repaid by a company shall convert at the relevant price without the discount
  • Shall convert into the most senior class of share in the company

Interest rate: 8% pa or higher if increased rate offered to private investors

Most favoured nation: British Business Bank automatically gets better terms if offered to private investors

Further information in relation to the Bounce Back Loan Scheme (BBLS) can be found here:

Further information in relation to the Coronavirus Business Interruption Loan Scheme (CBILS) can be found here:

Further information in relation to the Future Fund can be found here:

Note that, notwithstanding the widespread criticism from tech investors and entrepreneurs in relation to the terms of the loans, the Future Fund has proved very popular, receiving applications for more than £450m on its first day of operation.