
Small businesses can now benefit from a new fast-track finance scheme providing Bounce Back Loans with a 100% government-backed guarantee for lenders.
The first 12 months of the loan will be both interest free and with no repayments as part of the government’s package of support for businesses which have been affected by the coronavirus outbreak, offering up to £50,000.
The Bounce Back Loan 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 tax deferrals supporting hundreds of thousands of firms.
Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days – businesses can apply online through a short and simple form.
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 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 scheme launched for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.
The government is working with lenders to ensure Bounce Back 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.