A new 100 per cent government-backed loan scheme has been revealed to support small business during the Covid-19 outbreak.
Chancellor Rishi Sunak unveiled the new Bounce Back Loans scheme yesterday (27 April 2020) with businesses able to borrow between £2,000 and £50,000.
The scheme will launch for applications on Monday 4 May, with companies able to access loans through a network of accredited lenders.
The government will provide lenders with a 100 per cent guarantee for the loan and pay any fees and interest for the first 12 months.
Rishi Sunak, said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
Business leaders welcomed the new loans, with Carolyn Fairbairn, CBI director-general, calling the scheme “transformational”.
“Sole traders, micro-firms and entrepreneurs will now have a simple route to fast finance to stay afloat, without red tape or time-consuming checks.,” she said.
“Thousands of businesses could be saved by this lifeline. Banks now need to continue their work in overdrive to get the loans flowing faster.”
Jonathan Geldart, IoD director general: “This is a welcome intervention, which should help ensure more firms can access the finance that could see them through this crisis. Business leaders will appreciate the government’s continued flexibility in adapting their response to what’s happening on the ground.
“It’s crucial that the government’s support cuts through to those who need it. Having a quick and simple process will be vital, and we need to remember that taking on debt is always a difficult decision for small firms.”
Originally published in InsiderMedia
Further information about Government support for businesses and their employees during the coronavirus (Covid-19) pandemic can be found on the North Tyneside Business Forum website.