Chancellor Rishi Sunak has announced a new coronavirus ‘bounceback’ crisis aid scheme, offering small businesses up to £50,000 in loans that will be 100% guaranteed by the government.
Sunak told ministers that the loans were a consequence of SME firms struggling to access credit during the COVID-19 lockdown.
The Chancellor said the micro-loan scheme would be available from next Monday, and applications could be made simply at their bank via an online form. Applicants will not face a viability test, however, some fraud checks will be carried out before the loan can be granted.
Sunak said: “Businesses will be able to apply for these new bounce back loans for 25% of their turnover up to a maximum of £50,000 with the government paying the interest for the first 12 months.”
There have been widespread reports of banks being slow and reluctant to lend to SMEs under the Coronavirus Business Interruption Loan Scheme (CBILS) because they are liable for 20% of the risk.
Our smallest businesses are the backbone of our economy and play a vital role in their communities. Today’s new Bounce Back Loans will help ensure they get the finance they need quickly to help survive this crisis.
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— Rishi Sunak #StayHomeSaveLives (@RishiSunak) April 27, 2020