Tuesday, 28 April 2020
On Monday 27 April the Chancellor unveiled a new scheme aimed at providing more assistance to small businesses. This is thought to be in response to calls from business representatives for more to be done to help small businesses who need an immediate cash injection to keep operating.
The ‘Bounce Back Loans’ will allow small businesses to borrow between £2,000 and £50,000 via the fast-track finance scheme. The cash will be available within days, and in some cases 24 hours. The Government will provide lenders with a 100% guarantee for the loan.
The application process has been designed to be more straightforward than the existing Coronavirus Business Loan Interruption Scheme, with no forward-looking business viability tests or eligibility criteria for the finance.
In response to the announcement, the British Chambers of Commerce Director General, Adam Marshall, said:
‘The Chancellor has demonstrated he is listening to the concerns of our business communities and taking steps to get cash to the front line where it is needed’.
He continued:
‘This new route for our smallest companies to apply quickly and get a fast decision will be crucial to those who have struggled to get a CBILS loan’.
As the loan was only announced yesterday, full details of how it will operate will follow. Current details of the scheme are as follows:
- businesses will be able to borrow between £2,000 and £50,000.
- loans will be interest free for the first 12 months, with a low standardised interest charge for the remaining period of the loan.
- no repayments will be due for the first 12 months.
- the scheme will launch for applications on Monday 4 May.
- businesses can apply online through a short and simple form.
- successful applications will be paid out within days.
- loans will be 100% guaranteed by the government.
The loans will require repayment and the cashflow impact of future repayments will need to be considered when applying for the scheme.
If you have any questions, please get in touch with your usual contact at MHA Larking Gowen, or email [email protected]
You can find contact details on the Our People section of the MHA Larking Gowen website.
James Caley