New Bounce Back Loan for Small Businesses
The Chancellor announced a new micro loan scheme, with the aim of providing a simple, quick, easy solution for small businesses and in need of smaller loans. The new “Bounce Back Loan Scheme” will offer:
- loans of up to £50,000, capped at 25% of turnover;
- interest for the first 12 months will be covered by the government;
- there will be no fees;
- the government will provide lenders with a 100% guarantee;
- the government will work with lenders to agree a low rate of interest for the remaining period of the loan;
- loan terms will be up to 6 years; and
- no repayments will be due during the first 12 months.
The Chancellor has stated that most loans will arrive within 24 hours of approval and that the application process will be a simple, quick, standard form for businesses to fill in with no:
- forward-looking tests of business viability; or
- complex eligibility criteria.
The scheme will be delivered through a network of accredited lenders, and you can apply for a loan if your business:
- is based in the UK;
- has been negatively affected by coronavirus; and
- was not an ‘undertaking in difficulty’ on 31st December 2019.