Bounce back loan newish business

dutch2012

Hello
Ive just found out about the bounce back loan and I am considering applying as my businesses were decimated by corona. 

I started trading in April 2019 with a holiday cottage business and a dog training business. Everything was going great until corona came along. My plans to build the businesses were put on hold. 

I am currently on with sorting my self assessment for trading 2019-2020 and applying for a HSBC business account as my business was run through my first direct personal account. 

Will I still be eligible for a bounce back loan and what proof of earnings for the business do I require? I’m intending on applying for the full 50k in order to grow both business. Can i just tell HSBC when I apply for the loan that my estimated turn over will be 200k (I genuinely think this is a reasonable estimate) 

A lot of my trade was through airb&b so I can evidence that income and all cash payments were paid straight into my bank account. I’m a sole trader but also work another job on PAYE. 

Thank you 

Grumpy_chap

You can apply for 25% of 2019 turnover.  If you just apply for £50k because you declare £200k turnover, that will be fraud.

Thrugelmir

Why does a single property letting business require a £50k loan? Lenders won't accept a BBL as a deposit on a new property. 

Jeremy535897

Although furnished holiday lettings are not a trade, although they are treated like a trade for certain tax purposes, apparently most banks offering BBLs allow them for furnished holiday lettings, despite there being a requirement for 50% of the business to be a trading activity. However, it would have to be a very substantial holiday let/dog walking business to generate a turnover of £200,000.

dutch2012

I understood that you could estimate turnover going forward?Grumpy_chap said:

You can apply for 25% of 2019 turnover.  If you just apply for £50k because you declare £200k turnover, that will be fraud.

dutch2012

Jeremy535897 said:

Although furnished holiday lettings are not a trade, although they are treated like a trade for certain tax purposes, apparently most banks offering BBLs allow them for furnished holiday lettings, despite there being a requirement for 50% of the business to be a trading activity. However, it would have to be a very substantial holiday let/dog walking business to generate a turnover of £200,000.

This is where my problem lies. 

The main property is a 5 bedroom detached house in a desirable holiday area maintain bookings at 85 percent plus occupancy. Prior to the pandemic I received planning for a number of other holiday units on the site, Glamping pods. 

The purchase of these was to be made on income derived from this years trading through a b2b leasing company, however, I can’t achieve this now because of corona hence the bounce back loan. 

The other business again. Was going well but had to stop for a significant period of time and just starting to build that back up. 

Estimated turnover from my projections is about right. 

dutch2012

Thrugelmir said:

Why does a single property letting business require a £50k loan? Lenders won't accept a BBL as a deposit on a new property. 

I have added more info. 

Grumpy_chap

OK, do that if you like.  I doubt a fraud marker will make any difference.

OR look at the FAQ for BBLS https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/#f5

You can apply for 25% or your 2019 turnover, up to a maximum of £50k loan (£200k turnover).  Only new businesses can use the forecast turnover.  The forecast has to be based on something you can substantiate.

Non-trading business are not eligible (holiday lets), so only the trading dog-walking business qualifies.

Has the dog-walking business been affected by coronavirus?

I note that you have another PAYE job in addition to sole trader businesses.  How many dogs do you need to walk to achieve £200k turnover?

gary83

I expect a dog walking business would have been affected by coronavirus, surely some of the usual customers who have their dogs looked after whilst they’re at work have been stuck at home not needing a service. 

it would though have to be a pretty huge amount of walks to generate £200,000 in sales

Grumpy_chap

Not to mention the time it must take.
In addition to PAYE job.
Plus running the holiday lets.

dutch2012

Grumpy_chap said:

Not to mention the time it must take.
In addition to PAYE job.
Plus running the holiday lets.

I never alluded to the dog training business being a dog walking service. It is far more bespoke and profitable than a dog walking business averaging 14k profit per client. 

I’ve come on here asking for advice.
Thank you for the link, however, my businesses seems to fall between the gaps of the faq advice on the link you posted, which I had already read. Being a newly established business my cash flow has been decimated by corona and as I stated in an early post I have planning for expending the business with Glamping pods but now I am in a position where I can’t release the finance from b2b finance as my earnings have been severely affected. Hence the bounce back loan. 

But once things return to normal and both businesses are running well I anticipate takings of 200k plus.