Written 28 April 2020
Microbusiness “Bounce back” loans
In a statement to the Commons, Chancellor Rishi Sunak announced a new ‘bounce back’ small loan scheme for businesses affected by Covid-19.
The Chancellor announced the launch of a new “micro loan” scheme providing a simple, quick easy solution for those in need of small loans, which he termed “bounce back loans”.
The scheme will be available from 4th May 2020 and so is not available yet, and will deliver cash to successful applicants within 24 hours. It will be delivered by a network of accredited lenders.
It is intended to help small and medium sized businesses to borrow between £2,000 and £50,000.
These loans would cover 25% of a business’ turnover, up to the £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 repayment will be due during the first 12 months.
Eligibility
You can apply for the 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
Businesses not eligible to apply
The following businesses are not eligible for the scheme:
- 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’re already claiming funding
If you are already claiming under the Coronavirus Business Interruption Scheme (CBILS) you are not eligible to apply.
If you have already received a loan up to £50,000 under the CBILS scheme and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
As the scheme launches on Monday 4th May more information will be released in the coming days. The government information available as at today can be found here.
We can help you with providing information to support applications then please do not hesitate to get in touch.
