Covid-19 Small business ‘bounce back loans scheme’

On 27 April Chancellor Rishi Sunak announced a new Bounce Back Loans scheme which will provide loans of up to £50,000 to the smallest businesses affected by the coronavirus pandemic.

According to the Chancellor, the loans will be easy to apply for through a short, standardised online application and the loan should reach businesses within days.

The loans will be interest free for the first 12 months and will include a 100% guarantee for lenders. It is hoped this will speed up the loan process.

The scheme will launch for applications on Monday 4 May.

It was also announced that the government is also taking additional steps on the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure that lenders have the confidence they need to process finance applications quickly. The steps include

  • removing the per lender portfolio cap for the government guarantee, and
  • changing the viability tests that so that all banks will need to assess is whether a business was viable pre COVID-19.

Further details on the new announcements can be found on the Treasury website here.

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