Small businesses stricken by lockdown will get 'bounceback' loans of up to £50,000 with 100% government guarantees
What we know so far:
- Firms will be able to get loans worth up to 25% of turnover, with a maximum payment of £50,000
- The government will pay the interest for the first 12 months
- Loans are backed by 100% government guarantee
- There will be no forward-looking eligibility requirements
- The Chancellor has signalled that funds should be available within 24 hours of approval
To reassure entrepreneurs that the eligibility criteria won't be as hard to meet, the Chancellor said: "There will be no tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in."
Other coronavirus loans offered by the government are only 80% backed by the government. That still exposes banks to 20% of the risk, and has led to complaints that banks are not lending. This scheme will be a huge relief to the million micro-businesses in the UK.
Not much more on details, but we’ll keep you posted with information as it becomes available.