- 28th April 2020
- Posted by: Suzy Hill
- Category: Personal Tax, HMRC News, Business News
Covid-19:New 100% Government backed loan scheme for small businesses.
Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced yesterday.
Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
• Businesses will be able to borrow between £2,000 and £50,000 and access the cash within days.
• Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form.
• Loan terms will be up to 6 years.
• No repayments will be due during the first 12 months.
The scheme will launch for applications on Monday 4 May. Businesses will be able to access these loans through a network of accredited lenders.
The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan:
You can apply for a loan if your business:
• is based in the UK
• has been negatively affected by coronavirus
• was not an ‘undertaking in difficulty’ on 31 December 2019.
Who cannot apply
The following businesses are not eligible to apply:
• banks, insurers and reinsurers (but not insurance brokers)
• public-sector bodies
• further-education establishments if they are grant-funded
• state-funded primary and secondary schools
• if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
More information about the scheme will be published shortly.