As the COVID-19 pandemic continues to impact businesses around the world, many limited company contractors have been facing financial difficulties. In response to this, the UK government has introduced a new scheme to support these contractors – the bounce back loan.

The bounce back loan is a loan offered by the UK government to small and medium-sized businesses, including limited company contractors. This loan is designed to provide financial support to businesses that are struggling due to the pandemic and help them get back on their feet.

The loan is available to businesses that were established before March 1st, 2020, with a turnover of up to £45 million per year. The amount that businesses can borrow is between £2,000 and £50,000, with no interest or repayments to be made for the first 12 months.

For limited company contractors, the loan can be used to cover a range of expenses, from paying staff and suppliers to buying new equipment and investing in marketing and advertising. This can help contractors to keep their businesses afloat during this difficult time and continue to grow and develop.

However, it is important to note that the bounce back loan is a loan, and therefore must be repaid in full at some point. While the first 12 months are interest and repayment-free, after this time interest will be charged at a rate of 2.5% per annum.

It is also important to be aware that taking out additional loans and debt can impact your credit score, so it is crucial that limited company contractors carefully consider whether the bounce back loan is the right option for them.

Overall, the bounce back loan scheme is a valuable resource for limited company contractors who are struggling financially due to the COVID-19 pandemic. By providing access to much-needed funds, this scheme can help contractors to weather the storm and come out stronger on the other side.