HomeInsightsGovernment announces new 100% government-backed loan scheme for small business

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

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days.

The Government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days, providing immediate support to those that need it as easily as possible.

The scheme launches for applications on 4 May 2020 and firms will be able to access these loans through a network of accredited lenders.

The Government says that it will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible, and to agree a low standardised level of interest for the remaining period of the loan. To read the Government’s announcement in full, click here.