Added on: 27th April, 2020 by O1
Chancellor, Rishi Sunak, has announced a new 100% government backed loan scheme for small business will be launched on May 4th.
• The government will provide a 100% guarantee instead of the previous 80%. In doing so, this should eliminate the risk for banks and hopefully simplify the application process/make the loans easily obtainable.
• Businesses will be able to apply for a loan of up to 25% of their turnover, subject to a maximum of £50,000.
• Repayments will not be due for the first 12 months and during this period, any interest/ application fees will be covered by the government.
The new scheme will launch early next week and should involve the completion of a simple online form only. It is expected that funds will then be provided within days.
In order to apply for a loan under the scheme, your business must meet the following conditions:
• Based in the UK
• Has been negatively affected by coronavirus
• Was not an ‘undertaking in difficulty’ on 31 December 2019
The following businesses are excluded from applying:
• Banks, insurers and reinsurers (but not insurance brokers)
• Public-sector bodies
• Further-education establishments, if they are grant-funded
• State-funded primary and secondary schools
This announcement is in direct response to criticism that loans are too difficult/onerous to obtain under the previously announced Coronavirus Business Interruption Loan Scheme (CBILS).
If you have been able to obtain funding under CBILS, you will be unable to apply for further funding under the Bounce Back Scheme. However, if you have obtained a loan of £50,000 or less, this can be transferred by speaking to your lender before 4 November 2020.