A new 100% government backed loan scheme for small businesses has been announced. Businesses who have been affected by Coronavirus will be able to borrow between £2,000 and £50,000 and access the cash within days. They can apply for 25% of their turnover up to a maximum of £50,000. The loans will be interest free for the first 12 months and businesses can apply online.
Businesses who have applied for the Coronavirus Business Interruption Loan Scheme (CBILS) are not eligible to apply for the Bounce Back Scheme, they can however transfer the loan from CBILS that they have received into the Bounce Back Loan Scheme, this can be arranged with their lender until 4 November 2020.
The Chancellor said the new Bounce Back Loans scheme would help bolster the package of support available to small businesses affected by the pandemic.Small businesses are vital to the UK economy and will be crucial in creating jobs and supporting the economy as the country recovers.
The fast-tracked scheme has been designed for smaller businesses who require a vital cash injection to help with cash reserves. The government will provide lenders with 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 loan can be applied for online and should reach businesses within 24 hours of approval. This will provide the much needed immediate support that some businesses across Herefordshire and Worcestershire so desperately need.
The scheme will launch for applications Monday 4 May and firms will be able to access these loans through a network of accredited lenders.
This scheme will add to the support packages the government has previously announced to support businesses through the Coronavirus pandemic, the numerous schemes has already provided over £15 million in support over a few weeks and this new Bounce Back Loan Scheme will run alongside other initiatives announced.
Further details regarding eligibility and how to apply can be found on the governments website here.
Dr Adam Marshall, Director General of the British Chambers of Commerce, reacted to this new loan scheme: “The Chancellor has demonstrated he is listening to the concerns of our business communities and taking steps to get cash to the front line where it is needed.”
It is the worry of some businesses across Herefordshire & Worcestershire however that the amount of loan they will be taking on during this time will have potential negative consequences this may potentially have when the country is operating again and repayments are due.
To apply for the Bounce Back Loan scheme please visit here.
For further information regarding the support and guidance available to businesses, please visit our dedicated Coronavirus Information Hub.