New Bounce Back Loans Launched Today
- small businesses will be able to apply for quick and easy loans starting today
- businesses will be able to borrow between £ 2,000 and £ 50,000, with the money coming in within days
- loans will be 100% government guaranteed for lenders, and businesses can apply online through a short and simple form
Thousands of small businesses and independent traders – including commodities like hairdressers, cafes and florists – will be eligible for 100% government-backed rebound loans to help them weather the coronavirus outbreak .
Starting at 9 a.m. this morning, small business owners can approach approved lenders by filling out a simple online form, with just seven questions.
The government has also agreed with the lenders that an affordable flat rate of 2.5% interest will be charged on these loans. And any business that has already taken out a coronavirus business interruption loan of £ 50,000 or less can apply to switch them to this generous new scheme.
The Bounce Back loan scheme is the latest step in a package of leading support measures launched by Chancellor Rishi Sunak – with £ 7.5bn already in business grants, 4m jobs supported by the job retention program and generous tax deferrals supporting hundreds of thousands of businesses. To apply, see more information on the Bounce loan program.
The Chancellor of the Exchequer, Rishi Sunak, said:
Small businesses will play a key role in creating jobs and securing economic growth as we recover from the coronavirus pandemic.
The Bounce Back Loan Program will make sure they get the financing they need – helping them bounce back and protecting jobs.
Business Secretary Alok Sharma said:
We support small businesses, which are the backbone of our communities, with the support they need to stay afloat.
This new 100% government-backed loan program gives owners of smaller businesses the confidence and flexibility to borrow the amount they want. This will help ensure they can continue to trade and will be a key part of our efforts to restart the UK economy.
Under this scheme, small businesses can borrow between £ 2,000 and £ 50,000. The government will provide lenders with a 100% guarantee and cover the cost of fees and interest to the borrower for the first 12 months. No refund will be due during this period to allow businesses to get back on their feet.
Loans are available through a network of lenders, including the five largest banks.
- Eligible businesses will be subject to standard customer fraud, anti-money laundering (AML), and know-your-customer (KYC) checks prior to any lending. Certain state aid restrictions may apply to applications.
- The borrower always remains 100% responsible for the debt.
Government support for businesses of all sizes:
|size of the company||Turnover||Turnover> £ 45m||Investment quality|
|Bounce loans (up to £ 50,000)||X||X||X|
|Coronavirus Business Interruption Loan Program (CBILS)||X|
|Coronavirus Large Business Interruption Loan Program (CLBILS)||X||X|
|Covid Business Funding Mechanism (CCFF)||X|
|Business grants (depending on the assessed value of the property)||X||X||X|
|Covering the cost of statutory sickness benefits||X||X||X|
|Future Fund (only if funded by CR)||X||X|
Reactions from business groups:
Mike Cherry, National President of the Federation of Small Businesses, said:
“We know that many small businesses have struggled to get small loans quickly. We are delighted that the Chancellor listened to and quickly developed this new program that allows small businesses to access financing quickly, interest-free the first year and an affordable fixed interest rate for the rest.
Tej Parekh, chief economist at the Institute of Directors (IOD) said:
“The government has kept an open ear to business and continues to adapt its response to the coronavirus, which is very welcome. The business interruption loan program began to affect businesses, but small businesses still struggled to access financing. This additional measure should help more of these companies obtain the liquidity they need to support them in the weeks and months to come. “
Stephen Jones, CEO of UK Finance, said:
The Bounce Back Loan Program will help small businesses and independent traders quickly access the financing they need by filling out a simple online form with an approved lender.
This builds on the vast array of support lenders are already offering to help SMEs get through this difficult time, including capital repayment holidays, extended overdrafts and billions of pounds in loans.
Lenders accredited to offer Bounce Back loans have been working at the same pace as the Treasury to get this program in place by Monday, and staff are now focused on processing applications and channeling the money. to businesses as quickly as possible.
Rob Hattrell, vice president of eBay UK, said:
This is extremely welcome news for small businesses up and down the country that trade online and offline, including the 300,000 who trade on eBay daily. Many UK SMEs are in serious financial difficulty in the current crisis. Hopefully this government decision will help our very small businesses quickly get the financing they need to manage their cash flow or replenish their inventory.
While the existing CBIL scheme may be suitable for some businesses, our smaller businesses have told us that they have difficulty accessing this support from banks in practice. By extending the current government guarantee of 80% of each loan to 100%, we hope this will increase the likelihood that banks will extend funding at a critical time. And by making it easy to apply, SMEs should be able to get the help they need quickly, just when they need it most.
Dr Adam Marshall, Managing Director of the British Chambers of Commerce (BCC) said:
“The launch of the Bounce Back loan program is an important step in providing credit to small businesses that have so far struggled to access the financial support they need. Standardizing the interest rate that can be charged after the first 12 months is a welcome step in helping businesses manage their ongoing costs. > “We look forward to working with the government, the British Business Bank and UK financial institutions to ensure the new program quickly delivers liquidity to businesses on the ground. “
Rain Newton-Smith, chief economist at CBI, said:
The Chancellor is on the side of small businesses to help them get through the crisis.
A 100% government guarantee on loans and an easy way to apply will be a lifeline for many small businesses and independent traders under pressure.
Banks are running at full speed and need to stay in overdrive to get more money faster. Hurry up.