Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced today Monday 27th April.
- Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
- Loans will be interest free, with no fees nor repayments payable for the first 12 months.
- Online applications are due to open on Monday 4th May.
- The loans will be accessed through a network of accredited lenders.
- Companies who have received bailouts elsewhere from the Government, either through grants from local authorities or tax holidays, will still be able to apply for the new loans.
- Those who have already received a payment via CBILS can transfer the loan to the new Bounce Back scheme.
Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.
The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.
The Chancellor of the Exchequer, Rishi Sunak, said:
“Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
Business Secretary Alok Sharma said:
“Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover. This rapid loan scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.”
The Government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
To find out more about other sources of support for businesses provided by the UK & Scottish Governments, click HERE.