Covid-19 Bounce Back loans for property businesses

by Ranjan Bhattacharya

16:06 PM, 5th May 2020
About 3 months ago

Covid-19 Bounce Back loans for property businesses

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Covid-19 Bounce Back loans for property businesses

The Bounce Back Loan Scheme (BBLS) applies to buy to let landlords! In this video Andrew Roberts and I take a look at the eligibility criteria and how you can apply for up to £50,000 as an interest free loan for your buy to let property rental business.

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Covid-19 – Corona Virus Bounce Back Loan Scheme (BBLS) For Property businesses buy-to-let Landlords



Comments

Beaver

11:26 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Caring Landlord at 06/05/2020 - 11:23
So if you were a little guy and your BTL business was a significant part of your income then this loan isn't for you then? It's only for the big guys with large investment portfolios? Only for the rich people?

Chris @ Possession Friend

11:28 AM, 6th May 2020
About 3 months ago

BBLS - or Scottish £5 Million, loan for Landlords, - You know what's coming don't you ?
MHCLG have said Twice that they're looking to get the Social Housing Pre-Action protocol extended to the PRS, for a period , during - after Covid.
I covered that in my article here on Corona on 7th April.
The Pre-Action means you have to negotiate all avenues of rent re-payment, with the tenant before a court will grant Possession.
Call me cynical, but I can see a court asking a landlord why the ' Landlord ' hasn't availed themselves of the govt measures ( Yes, I know that means Taking out a loan to pay your tenants rent, seriously, I know it sounds bonkers ) before bringing the possession claim.
I do hope I'm wrong on this, but I can just see another "bus" coming that we're going to get thrown under.

Luke P

11:29 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Phil Ashford at 06/05/2020 - 10:53
Phil, I’ve read similar comments of yours on other platforms. If you haven’t already, and with your knowledge of trading/investment, would you mind commenting under the above video over on YouTube, please? I’d be keen to see what is said on there (particularly by Ranjan) and didn’t to simply steal your comment.

Phil Ashford

11:40 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Luke P at 06/05/2020 - 11:29
Hi Luke. That’s one of the first places I commented. Ranjan has since liked other comments, typed replies to others but has skipped mine out.

He has also skipped my comment out on his FB page.

It’s eerily quiet wherever this 50% Trading Activity Eligibility Condition is raised.

On some platforms I’m taking a beating for being a Neg Head. I’ve only read the Eligibility Criteria of the government’s Bounce Back Loan Scheme instead of relying on the questions on a bank’s application form, which require us to confirm we are eligible for the scheme.

Caring Landlord

11:42 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Beaver at 06/05/2020 - 11:26
This makes no sense

Beaver

11:46 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Caring Landlord at 06/05/2020 - 11:42
I'm just trying to make sense of this loan scheme. Most landlords have a small portfolio and what they make out of their BTL portfolio normally isn't subject to National Insurance. So if I've understood these posts on this thread correctly then if you were a small BTL landlord, maybe retired, a sole-trader, or maybe self employed and supplmenting your income, then you wouldn't qualify for this loan.

This loan is only for rich people.

Or have I misunderstood?

Caring Landlord

11:49 AM, 6th May 2020
About 3 months ago

Reply to the comment left by Beaver at 06/05/2020 - 11:46
Ok

1. These bounce back loans are deemed micro loans. They are capped at £50k. Hence they are not for the big boys and girls anyway.

2. Big portfolio landlords are also running investment businesses and are similarly not eligible

So no landlord (renting properties) businesses qualify. Rich or poor. Big or small.

Ray Davison

12:00 PM, 6th May 2020
About 3 months ago

Reply to the comment left by Phil Ashford at 06/05/2020 - 11:40Phil,
On the British Business Bank website where the eligibility criteria is given the phrase used is actually 'is engaged in trading or commercial activity in the UK and was established by 1 March 2020'. However it must also be a Ltd company. Now whilst Landlords are not generally considered as Trading (Although I understand the debate about splitting value increase and letting activity) we are surely engaged in commercial activity?

Phil Ashford

12:07 PM, 6th May 2020
About 3 months ago

Reply to the comment left by Ray Davison at 06/05/2020 - 12:00
Hello Ray. It does say that under Eligibility Criteria 1. But it doesn’t say that in Eligibility Criteria 8.

In effect it is saying, if your were engaged in any trading or commercial activity prior to 1 March AND your income in the year ended 31 Dec 2019 was made up of more than 50% from Trading Activity AND you have suffered negatively because of Coronavirus, THEN you can apply for up to 25% of ALL of your income (including rent) up to a £50k maximum government backed loan.

Reading just one Eligibility Criteria without taking into account leads you to a false conclusion and that is why I’ve asked both Ranjan and Andrew. Andrew does say in this video, that the Bounce Back Loans are not subject to the same 50% of Trading Activity as Small Business Interruption Loans, but that is demonstrably incorrect as per the link here (It’s Eligibility Criteria 8 that most landlords will fail on - not whether they are included under Eligibility Clause 1): https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/#f2

See “Am I Eligible” Then bullet point 8.

Ray Davison

12:22 PM, 6th May 2020
About 3 months ago

Reply to the comment left by Phil Ashford at 06/05/2020 - 12:07Hi Phil,
Thanks for the response. I do understand that and you are correct, one should not read only one of the criteria and ignore the rest as that will surely get you into trouble. I wonder however if this may just be a lapse in the drafting of a hastily created policy. My reasoning is that point 1 says 'Trading OR Commercial Activity'. Therefore by definition if you are ONLY the latter then you will fail point 8 unless point 8 is a mistake in drafting. If point 8 is not a drafting mistake then point 1 must be poorly drafted as no entity that fits the 'or commercial activity' test would ever pass point 8.

Oh, and you don't need to be Ltd, tax resident in the UK is sufficient, my poor reading of that point.

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