On 4 May 2020 the government launched a micro loan scheme for small businesses as it continues to try and mitigate the economic damage caused by the coronavirus (COVID-19) lockdown.
The Bounce Back Loan Scheme allows small businesses adversely affected by COVID-19 to apply for up to £50,000, with the government guaranteeing 100% of the advance.
Businesses can borrow from £2,000 to £50,000 or 25% of their turnover which is interest free for 12 months, moving to just a 2.5% loan charge for the remaining payments.
The eligibility criteria is vastly wider with far less hoops to jump through. Some of our clients have reported getting decisions on the same day and money on the next.
Businesses will be able to access the loans through the existing network of accredited lenders and the government said it expects most applications to be approved within 24 hours.
Chancellor of the Exchequer, Rishi Sunak, 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.'
Internet link: GOV.UK publications
Covid-19 Information Centre Link: Bounce Back Loan Scheme