Small businesses boosted by bounce back loans

Small businesses boosted by bounce back loans

Small businesses boosted by bounce back loans

A new 100% government backed loan scheme is available for small and medium sized businesses.

  • Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
  • Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form

 

Small and medium sized businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced on Monday 27 April.

The new Bounce Back Loans scheme, which launches on Monday 4 May, 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. The loan term will be up to 6 years and loans are to be paid out within days so that immediate support is available for those that need it the most.

 

  • You will be eligible to apply if your business is UK based, has been negatively affected by the virus and was not an ‘undertaking in difficulty’ on 31 December 2019.
  • You will not be able to apply if you are already claiming funding through the Coronavirus Business Interruption Loan Scheme (CBILS). However if you already have a loan with a lender under CBILS terms, you will be able to transfer it to the Bounce Back Loan Scheme.
  • You will be ineligible for these loans if your business operates as a bank, insurer or reinsurer (but not insurance brokers), a public body or a state-funded school.
  • Further information is available on the UK Government website.