Thousands of small firms and sole traders will be eligible for 100% government-backed Bounce Back Loans to help them make it through the coronavirus outbreak.
From today (4 May), small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.
The government has also agreed with 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 have these switched over to this generous new scheme.
The Bounce Back Loan scheme is the latest step in a package of world-leading support measures launched by Chancellor Rishi Sunak – with £7.5bn already awarded in business grants, four million jobs supported through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.
Sunak, said: “aSmall businesses will play a key role creating jobs and securing economic growth as we recover from the Coronavirus pandemic.The Bounce Back loan scheme will make sure they get the finance they need – helping them bounce back and protect jobs.”
Business Secretary Alok Sharma added: “We are backing small businesses, which are the backbone of our communities, with the support they need to stay afloat.
“This new scheme of 100% government-guaranteed loans gives owners of even the smallest businesses the confidence and flexibility to borrow a sum which works for them. This will help ensure they can continue to trade, and be a key part of our efforts to reboot the British economy.”
As part of the 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 any fees and interest for the borrower for the first 12 months. No repayments will be due during this period to enable firms to get back on their feet.
The loans are available through a network of lenders, including the five largest banks, such as HSBC, Barclays, RBS, Lloyds and Santander.