It was announced yesterday by Chancellor of the Exchequer, Rishi Sunak, that the UK’s smallest businesses will have guaranteed access to loans of up to £50,000 within 24 hours of applying.
The new ‘bounce back loans’ will be 100% guaranteed by the Treasury, meaning the government will take on all the default risk, and will be available from next Monday (May 4) at 9am.
Small businesses will be able to access loans worth 25% of their turnover, up to £50,000, and the government will pay the interest for the first 12 months.
Mr Sunak said banks will not need to perform any forward looking tests of businesses viability and that businesses would need to fill out just a simple, quick, standard form. Businesses will not even need to provide proof of turnover in the application process.
The new loans are separate from the government’s £330 billion coronavirus business loan scheme. Businesses are not able to apply for loans from both schemes, according to a Treasury Spokesman.