Small businesses boosted by bounce back loans

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 27 April).

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 government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

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.

New information released on 28th April:

– The scheme will go live from Monday 4th May 2020 and cash will be released within days for eligible businesses.

– Businesses can borrow between £2,000 and £50,000.

– The Government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

– Loan terms will be up to 6 years.

– The Government will work with lenders to agree a low rate of interest for the remaining period of the loan.

– The scheme will be delivered through a network of accredited lenders.

Read more here and here to apply once it opens.