The Government has announced a new 100% Government backed loan scheme for small businesses.

Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

• Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
• Loans will be interest free for the first 12 months
• No repayments will be due during the first 12 months. 
• The government has set the interest rate for this loan at 2.5% per annum.
• Loan terms will be up to 6 years.
• Businesses can apply online through a short and simple form.

The Scheme will be delivered through a network of accredited lenders and it is recommended you contact your business bank to begin with.

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.

WHO CANNOT APPLY

The following businesses are not eligible to apply:

• 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
• if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).

Further guidance on how to apply and a list of lenders is given on the British Business Bank Website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/for-businesses-and-advisors/