Chancellor Announces 100% Government-backed COVID-19 Loans for Small Businesses

Chancellor Announces 100% Government-backed COVID-19 Loans for Small Businesses

A new loan scheme for smaller firms in need of financial support during the coronavirus crisis is set to launch, with the government paying the interest for the first 12 months.

The new Bounce Back Loans scheme, announced by the Chancellor, will allow small and medium 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 businesses will be able to apply online through a short and simple form.

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 the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.

Businesses can apply for a loan if they:

Are based in the UK.

Have been negatively affected by coronavirus (COVID-19).

Were not an ‘undertaking in difficulty’ on 31 December 2019.

Rishi Sunak said the scheme will help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic. It will run alongside the Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The Chancellor said:

‘Our smallest businesses are the backbone of our economy and play a vital role in their communities.

‘This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.

‘This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.’

The scheme will launch for applications on Monday 4 May 2020.

More information about this funding opportunity and the application process is available on the GRANTfinder funding information platform. GRANTfinder provides up-to-the minute content, insight and analysis on funding news. To find out more about how GRANTfinder can keep you in the know, and subscription fees, contact us today.