Micro Business Loan Scheme

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.

You cannot apply if you have already received a loan via CBILS, however if you have already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan Scheme, you can arrange this with your lender until 4th November 2020.

The loans will be available from next Monday (4th May 2020), and we await further details of the application process.