Last month, Chancellor of the Exchequer Rishi Sunak announced a £330 billion coronavirus business interruption loan scheme. However, there were reports that the application process for the scheme was complicated, payments were delayed in reaching firms, and that banks were requesting personal guarantees (such as homes) for small loans.
On 27 April 2020 the Chancellor outlined a new 100% government-guaranteed loan scheme specifically for amounts up to £50,000.
Introduction
This (Coronavirus Bounce Back Loan) scheme is not available yet. It will launch on 4 May 2020.
The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
The scheme will be delivered through a network of accredited lenders.
Eligibility
You can apply for a loan if your business:
- is based in the UK
- has been negatively affected by coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
If you’re already claiming funding
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
How to apply
The Bounce Back Loan scheme will launch on 4 May 2020.
According to the Chancellor’s announcement these loans will not require forward looking criteria or complex eligibility requirements. Businesses will be able to apply for a loan using a short and simple online form.