The government has announced a new scheme of micro loan funding which will be launched on 4 May to assist businesses adversely affected by Coronavirus.
The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000. The scheme is capped at 25 per cent of turnover and promises a streamlined application process, a response to criticism that not enough struggling businesses are able to access the current Business Interruption loan scheme.
The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.
Loan terms will be up to 6 years. No repayments will be due during the first 12 months. 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
- has been negatively affected by Coronavirus
- was not an ‘undertaking in difficulty’ on 31 December 2019
You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS), but if you already have a CBILS loan up to £50,000 you can arrange with your lender to transfer into a bounce back loan by 4 November 2020.