As part of the government’s measures to mitigate the economic damage caused by the coronavirus (COVID-19) lockdown, Chancellor Rishi Sunak has announced a micro loan scheme for small businesses.
The Bounce Back Loan Scheme will allow small businesses adversely affected by COVID-19 to apply for up to £50,000, with the government guaranteeing 100% of the advance. Businesses can apply for a minimum of £2,000, up to a maximum of £50,000, or 25% of business turnover, with the government paying the interest for the first 12 months.
The scheme will open at 9am on 4 May and, according to the Chancellor, most loans will be paid within 24 hours of approval. Businesses will be able to access the loans through the existing network of accredited lenders.
The Chancellor said: ‘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.
‘If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through the crisis.
‘Some businesses will not want to take on more debt, which is why our focus has been on cash grants, tax cuts and tax deferrals. But for others, loans will be part of the answer.’