Published: 29/04/2020 By Dean ClarkThe Government has announced a new 100% Government backed loan scheme for small businesses.
Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced yesterday.
Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to a maximum of £50,000, or 25% of annual business turnover, whichever is lower, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
- 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.
- Loan terms will be up to 6 years.
- No repayments will be due during the first 12 months.
The scheme will launch for applications on Monday 4 May 2020 and businesses will be able to access these loans through a network of accredited lenders. According to the Chancellor, ‘most’ loans will be paid within 24 hours of approval.
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.
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
The following businesses are not eligible to apply:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- further-education establishments if they are grant-funded
- state-funded primary and secondary schools
- if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS)
More information about the scheme will be published shortly.
Further details see: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
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