Starling BBL. are they interest free for a year or not??

fenwick458

Applied for a loan, after waiting a few months I've been given an offer, but it isn't very clear. I phoned up starling yesterday but the guy "wan't authorised to give advice regarding loans" and instead pointed me to the help section of the website. well I've looked there, and I can't find the answer.
will try again today when I get chance, but in the meantime, can anybody clear this up for me: 

"Important Information About Your Starling Loan

Good news! Your loan application has been approved and Starling is prepared to offer your company

a loan. Your company will need to repay this loan over 72 months at a fixed interest rate of 2.5%.

For the first 12 months, your company will only be required to repay the interest that accrues on this

Loan during that time and, as you’ve applied under the Bounce Back Loan Scheme (BBLS), this

interest will be paid by the government via a ‘Business Interruption Payment’ to Starling directly

(unless your company doesn’t qualify)."

where do I find out if I qualify? I would have thought it would have said on the summary sheet.

on the summary sheet I can see this bit:

"Has Borrower agreed to the Business Interruption Payment?  Answer: Yes"

Does that mean I pay the interest or what?

Jeremy535897

Your company should not have to pay the interest for the first 12 months. Your company must have qualified to get the loan in the first place. Presumably that wording is a safety net for them if it turns out, for whatever reason, that the company didn't qualify after all.

jfinnie

The wording is as it is.  The loan is taken by the business, and 2.5% interest is payable by the business for the duration, with capital payments beginning 12 months after taking the loan.  The Govt make a Business Interruption payment direct to the bank on your behalf to cover the first year's interest; if you met the criteria you certified during the application process you should have nothing to worry about.  If for some reason that BIP wasn't forthcoming from the Govt then you'd still owe the 2.5% interest to Starling.

I have a loan with Metrobank and I received an email a couple of months after taking it out which said the following:

Hello xxxxxx,

We're getting in touch about your Bounce Back Loan for xxxxxxxxx LIMITED provided on xx/06/2020. This is for your information only, and you don't need to do anything further.

As part of the UK Government's Bounce Back Loan and under the Temporary Framework for State Aid measures that were introduced during the coronavirus pandemic, you are entitled to a Business Interruption Payment ("BIP") from the UK Government.

This payment is £xxx.xx and covers the interest payments on your loan for the first 12 months of your term of £xx.xx each month.

Interest payments
As you have directed in the application process for your Bounce Back Loan, the payment of the above interest will be made directly to Metro Bank by the British Business Bank, and no further action is required on your part.

The total amount of your BIP is £xxx.xx, the total amount of your Bounce Back Loan is £xxxxx.00 and the total combined amount of your BIP and your Bounce Back Loan is £xxxxx.xx.

The value of the aid arising from this facility is £xxxxx.xx.

fenwick458

thanks for the replies, yes that seems to be the case, I had e-mailed starling last night they finally replied today and said in plain English, you don't pay anything in the first year