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On Monday 27th April the Chancellor, Rishi Sunak, announced the launch of a new 100% government backed loan scheme for small businesses known as the coronavirus Bounce Back Loan.
Businesses will be able to borrow between £2,000 and £50,000 on an interest free basis for the first twelve months, with applications opening online as soon as May 4th. The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.
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The Government hope that the new Bounce Back loam scheme will help to bolster existing support available to the smallest of businesses and is designed to ensure that small firms who need vital cash injections to keep operating receive finance in a matter of days.
The new loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000. The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. No repayments will be made during the first 12 months and the loan term can be up to 6 years. The government will work with lenders to agree a low rate of interest for the remaining period of the loan.
You can apply for a loan if your business is based in the UK and has been negatively affected by coronavirus but you should not have been a business already “in difficulty” on 31 December 2019. We have yet to have any further detail on what this means, but it is clearly an attempt by Government to ensure that the help goes to businesses affected by Coronavirus and not one already in financial difficulties prior to the current crisis.
If you have already applied for a loan under the Coronavirus Business Interruption Loan Scheme (CBILS) you cannot apply for a bounce back loan. If your loan on the CBILS is £50,000 or less you may wish to transfer it into the Bounce back Loan Scheme, you can arrange this with your lender until 4 November 2020.
Full details as currently published can be found here.
If you have any questions or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.
