Government to Provide Loans of upto £50,000, Delivered within 24 Hours

Yesterday Rishi Sunak, the Chancellor of the Exchequer announced a new business loan scheme aimed at helping small businesses during the Coronavirus pandemic. The ‘Bounce-Back Loan’ scheme will be launched on 4th May and will run alongside the existing Coronavirus Business Loans Interruption Scheme (CBILS) managed by the British Business Bank.

The scheme is aimed at small and medium-sized businesses and offers loans up to £50,000. It promises a streamlined application process with the goal to deliver cash to successful applicants within 24 hours and the scheme is 100% guaranteed by the government.


How Do I Know If I Am Eligible?

You can apply for a loan if your business:

  • Is based in the UK;
  • Has been negatively affected by coronavirus; and
  • Was not an ‘undertaking in difficulty’ on 31 December 2019.


How Much Can I Borrow?

The loan scheme is to provide loans of between £2,000 and £50,000 and the Government have said that loans are likely to be capped at 25% of business turnover.


What Are the Repayment Terms?

  • No fees or interest due for the first 12 months;
  • No repayments due during the first 12 months;
  • 100% guaranteed by the Government;
  • Repayment terms of up to six years are available; and
  • Low interest rates after initial 12 month interest free period.


How do I Apply?

The scheme will launch on the 4th May and will be delivered via a network of accredited lenders. Due to the criticism surrounding the lengthy and complex application process for the CBILS, we are told there will be a simplified application process for the Bounce Back Loans.

This will be made up of a two page self-certification online application with no affordability checks and no need to provide a forecast in a most uncertain time. The government have also stated that applicants will receive their cash within 24 hours of acceptance.


Further Details

The following businesses are not eligible to apply:

  • Banks, insurers, and reinsurers (but not insurance brokers);
  • Public-sector bodies;
  • Further-education establishments if they are grant-funded; and
  • State-funded primary and secondary schools.

You cannot apply for the bounce back scheme if you’re currently using the Coronavirus Business Interruption Loan Scheme (CBILS). However if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.

As always, if you would like any further information on your options or any of the other changes announced, please contact us

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