From Monday (May 4) the Treasury is to offer 100% guarantees on loans given to small businesses up to the value of £50,000.
This Bounce Back Loan Scheme is designed to help small and medium-sized businesses affected by coronavirus, the Chancellor of the Exchequer announced yesterday (Monday).
Businesses may borrow between £2,000 and £50,000 and the government will guarantee 100% of the loan, with no fees or interest to pay for the first 12 months.
Loan terms will be up to six years and 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. The scheme will be delivered through a network of accredited lenders.
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 December 31, 2019.
The scheme is not open to banks, insurers and reinsurers; public sector bodies; further-education establishments if they are grant-funded; and state-funded primary and secondary schools.
You also can’t apply if you are already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS).
If you have 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 November 4 this year.
The British Independent Retailers Association – parent group of the Pet Product Retail Association – has welcomed the new scheme.
CEO Andrew Goodacre said: “Independent retailers who have had their business closed and have failed with CBILS desperately need working capital as they prepare to open the doors of their shops as we transition from lockdown.
“We have been asking for more support and I am really pleased about this. I would like to see the detail of these new loans to ensure that they will truly support our members and independent retailers in general.”