Bounce Back Loan - What can it be used for?

jimreynolds64

Hi,
We have had a BBL approved however we are now confused over what we can use it for?
We planned it to allow our business to grow following our loss of growth during COVID lockdown, by purchasing equipment that we were otherwise going to lease purchase. However in our documentation - it states we can not use it to purchase fixed assets?
Has anyone else used it for this? Can anyone help clarify?
Many thanks.

foxy-stoat

I don't think its to enable your business to grow, its to keep your business afloat during times of reduced turnover.  I am sure a lot of business will abuse the scheme though.

Grumpy_chap

In the FAQ, it states that the loan can only be used to provide an economic benefit to the business, for example providing working capital, and not for personal purposes.  Re-financing is also permitted.

I would interpret that as acquisition of new equipment for the business as that is still "economic benefit to the business".  I disagree with @foxy-stoat as if your business grows, that creates new jobs which is even better than just keeping the business afloat and sustaining current jobs.  It should be the same business, not something entirely different or "investment" business.

Ultimately, so long as the loan is repaid, it is possible that no-one will ever ask anything further.

The FAQ are here:
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/#f15 

phillw

jimreynolds64 said:

However in our documentation - it states we can not use it to purchase fixed assets?

I assume they don't want to underwrite a loan that sees you buying something that you'll then write off over the next few years and offset against your tax bill. I don't know how they'd enforce that though.
It's intended to keep a company afloat and I think very few companies would achieve that by expanding right now.

JayMawds82

I got one. I'm a cabbie. I used it to pay off credit cards in full. 
It was literally the difference between staying afloat and the high possibility of going under.