Tue 28 Apr 20
Chancellor, Rishi Sunak has announced details of the launch of 'bounce back loans' yesterday.
The loans will be available for small businesses, up to £50,000, backed by a government guarantee.
“Around half a million employers have already applied for help to pay the wages of over four million furloughed jobs,” noting that these jobs “might otherwise have been lost.”
“I know that some small businesses are still struggling to access credit. They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place,”
The Chancellor outlined more details on his Twitter feed.
"Today, we're announcing a new loan scheme. A simple, quick, easy solution for those in need of smaller loans. Businesses can apply for new Bounce Back Loans up to a maximum of £50,000, or 25% of turnover, with the government paying the interest for the first 12 months.
We've been in close talks with the banks in recent days and these loans will be available from 9am next Monday. There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.
For most firms, loans should arrive within 24 hours of approval. And I have decided, for this specific scheme, that the government will support lending by guaranteeing 100% of the loan.
We shouldn't ask taxpayers to bear all the risk of lending almost unlimited sums to businesses who may have very little prospect of paying those loans back – and not necessarily because of coronavirus. So I don't think it's right to provide 100% guarantees on all our schemes.
Instead, the new Bounce Back Loans carefully target that extraordinary level of state support at those who need it most. And the £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses"