The Government announced new “bounce back loans” yesterday. This is separate from the existing CBILS loan scheme.
These loans are very much aimed at small businesses who may have found other measures hard to access.
- 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;
- the government will pay any fees in the first 12 months;
- no repayments will be required during the first 12 months;
- the loans can be repaid with no early repayment charges;
- the Government will guarantee 100% of the loans;
- to be eligible a company needs to have been trading on 1 March; So this is not for new start-ups.
The loans will be easy to apply for through a short, standardised online application. The cash should reach businesses within 48 hours the Chancellor said, providing immediate support to those that need it as easily as possible.
The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of 48 lenders accredited by the state owned British Business Bank.
It is hoped that shifting responsibility for all losses onto the public sector in the Bounce Back scheme will encourage lenders to get money to the smallest companies more quickly
Bounce Back loans will be available to any smaller company for up to 25pc of their turnover, capped at £50,000. The effective £200,000 limit means it would cover all of UK’s the 5.6 million micro-businesses with up to nine employees.
We would very much like to hear from any client we would like to apply for one of these loans so we can offer any help needed and so that we can feed back experience to the rest of the client base.