The new scheme – which is 100% government backed – means that businesses will be able to borrow between £2,000 and £50,000 and will be able to access the cash within days; providing immediate support to those that need it.
Chancellor Rishi Sunak said that the new Bounce Back Loans scheme will help boost the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
The scheme has been announced alongside the £6 billion awarded in business grants, supporting four million jobs through the job retention scheme and tax deferrals supporting hundreds of thousands of firms.
Small businesses can apply online through a short and simple form and for the first 12 months, loans will be interest free.
“Our smallest businesses are the backbone of our economy and play a vital role in their communities,” said Rishi Sunak, Chancellor of the Exchequer. “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 Secretary, Alok Sharma, agrees that small businesses are vital for the economy, which is why this new scheme has been implemented: “Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover.
“This rapid loan scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.
“The scheme will launch for applications on Monday 4 May. Firms 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.”