Chancellor Rishi Sunak announced on 27 April a new micro-loan scheme. The Bounce Back Loan allows businesses to apply for a loan of up to 25% of their annual turnover, up to a maximum of £50,000.
There will be no business viability checks for the Bounce Back Loan, only the usual fraud checks banks are required to make to ensure the business is a legitimate company.
Applications will open from Monday 4 May, with applications via a short and simple online form. Businesses can apply to borrow between £2,000 and £50,000. Sunak said in his statement that most firms will receive their loan directly into their bank account within 24 hours of approval.
The loans will be interest free for the borrower for the first 12 months, with the Government covering this interest, and there will be no early repayment penalties.
Crucially, and in contrast to the Coronavirus Business Interruption Loan Scheme (CBILS), businesses will not be required to provide evidence of future viability, only that they were commercially viable before the crisis began.
Mike Cherry, national chairman of the Federation of Small Businesses, said: “This crucial new initiative should enable thousands of small businesses to access the working capital they need quickly, helping to protect the millions of jobs they provide in every part of the UK.”