In these times of uncertainty, the bounce back loan scheme provided by the government can seem like a saving grace. However, it will only be a saving grace if you choose what to do with it wisely. None of us knows when our businesses will return to normality. And it is for that reason you don’t know how long you’re going to need the loan to cover for. Rather than impulsively spending your loan on silly things, today we look at why you should put the funds into a pot. Starling Bank is one of the perfect banking providers if you’re wanting to put your bounce back loan away for a rainy day.
They allow you to set up multiple savings pots that your loan funds can be put into. On top of this, they have what is called a ’rounding up’ feature. This means that when you are making purchases from your account, any odd change will be put into the savings pot. For example, if you buy something for £9.70, they will automatically round this up to £10.00 meaning that 30p will go into your savings pot.
It’s not free money!
Another reason why you should consider saving your bounce back loan is that you’re going to have to pay it back one day. This is something that appears to have been lost on quite a few people with no specific end date in sight. And if you don’t pay back the loan within a year you’ll find yourself paying interest. This may be subject to change, however, this is the case at the moment. You also shouldn’t automatically go for borrowing as much as you can. You can borrow up to 25% of your annual turnover, however, this doesn’t mean that you should. After all, the more you borrow, the more that you’re going to have to pay back.
Give your savings pot a purpose
Another innovative feature with Starling Bank is that you can name your savings pot. This means that you can put your bounce back loan funds straight into a savings pot and name it as such. This will save you getting confused with other savings pots you might have active. These savings pots are available both to personal and business users of Starling Bank. So there is no need to worry if you haven’t upgraded to a business account yet. Although that is something you might want to consider as there are a tonne of benefits of doing so. If you want to know more about the benefits of Starling Bank and saving your bounce back loan, get in touch. Our team here at D&K Accounting can run you through the best practices for saving and spending your bounce back loan wisely.