This afternoon the Chancellor of the Exchequer, Rishi Sunak, announced the launch of a new micro loan scheme for those small businesses needing extra ‘fast tracked’ financial support as a result of the pandemic. The new ‘Bounce Back’ loans of 25% of turnover up to £50,000 will be the only loans that are 100% Government guaranteed for the first 12 months.
This is welcome news following many industry organisations including Kingston First urging the Government to look for a solution to support smaller businesses above a rateable value of £51,000, therefore not eligible for business grants and struggling to access cash quickly through the Coronavirus Business Interruption Loan Scheme (CBILS).
Businesses will be able to apply for the loans through their banks from 9am on Monday 4 May through a ‘quick and easy’ application; no forward-looking tests on business viability will be required. Cash should arrive to applicants within days. No repayments will be due in the first 12 months.
The Chancellor also provided an update on the progress of the other business support schemes that have been launched in the last 6 weeks including:
- Almost half of all business properties in England will pay no business rates this year
- Almost 1 million business premises can now receive cash grants of up to £10,000 or £25,000
- Over 20,000 CBILS applications have now been approved.
- Over 2 million businesses have been offered a VAT deferral, saving an average of £30k
- 4 million workers have been furloughed using the Coronavirus Job Retention Scheme
We will provide more details on the Bounce Back loan as they become available.