Please find below the Government’s announcement of the ‘Bounce Back’ Loans Scheme.
The scheme will allow businesses to borrow £2000-50,000, which will be backed by a 100% guarantee by Government. The loans will be interest- and fee-free for the first 12 months. There will also be no requirement for repayments in the first 12 months. The application process is quick and simple and successful applicants can expect the funds to be available within a few days of applying.
The Government has also amended the application process for the Coronavirus Business Interruption Loans Scheme, including a change to the business viability test.
New 100% government backed loan scheme for small business
The new Bounce Back Loans scheme, announced by the Chancellor will allow businesses 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 from Monday 4 May, 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 loans will be easy to apply for through a short, standardised online application. Loans should reach businesses within days – 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 accredited lenders. 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.
The new scheme will run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).
The Government is also taking additional steps on the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure that lenders have the confidence they need to process finance applications quickly, including removing the per lender portfolio cap for the government guarantee, and changing the viability tests that so that all banks will need to assess is whether a business was viable pre COVID-19.