Chancellor Rishi Sunak announced Bounce Back Loans, 100% government-backed loans for small businesses.
The new scheme allows businesses to borrow between £2,000 and £50,000 and access the cash within days. Loans will be interest free for the first 12 months, with the Government paying any fees and interest during that period. Crucially, no repayments will be due during the first 12 months.
Businesses can apply online through a short standardised online application form from Monday 4th May and the cash should reach successful applicants within days, providing immediate support to those that need it as easily as possible.
Small firms will be able to access the loans through a network of accredited lenders. The Government will work with lenders to ensure loans delivered through the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
The new scheme will run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The Government is also taking additional steps on the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure lenders have the confidence they need to process finance applications quickly, including removing the per-lender portfolio cap for the government guarantee, and changing the viability tests that so that all banks will need to assess is whether or not a business was viable pre COVID-19.
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