COVID-19: Small firms to get 100% state-backed loans
- Details
The Bounce Back Loans scheme, launching on 4 May, is a response to the slow take-up of emergency bank lending during the COVID-19 crisis, which has meant businesses could fold before getting loans.
The scheme will require filling in a two-page self-certification form online and will unlock loans of up to £50,000 “within days of applying”.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
To be eligible, a business:
- must be based in the UK
- must have been negatively affected by the coronavirus crisis
- was not an ‘undertaking in difficulty’ on 31 December 2019
Loan terms will be up to six years, with no repayments due during the first 12 months.
The government will work with lenders to agree a low rate of interest for the remaining period of the loan. The scheme will be delivered through a network of accredited lenders.
Businesses cannot apply if they are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), but it’s possible to transfer a CBILS loan into the Bounce Back Loan scheme until 4 November.
