A bounce-back loan support scheme of up to £50,000 has been announced by the government for small businesses that might otherwise 'fall through the cracks'.
Rishi Sunak, Chancellor of the Exchequer unveiled the addition to existing support measures that have been deployed for firms to struggling to cope as the Covid-19 crisis continues in the UK.
This latest scheme offers small businesses 'fast track finance' through loans of up to £50,000 with no repayments or interest for the first 12 months.
The loans will also be 100% guaranteed by government, and will open for applications on Monday 4 May.
There will be a maximum loan term of 6 years and the government will work with lenders to ensure low rates of interest for the remaining term.
Companies can apply for loans of up to 25% of their annual turnover, so targeting enterprises turning over £200,000 or less.
Application is made through a short, online, standardised process with the offer and transfer of funds theoretically within days.
This latest measure comes in addition to grants already announced, income tax and VAT payment deferrals and the job retention scheme.
Martyn Dobinson, partner at accountancy firm Saffery Champness, said the loan is 'welcome news' for smaller rural enterprises who will be able to access amounts of between £2,000 and £50,000.
“It will throw a lifeline to many smaller rural businesses who have been unsuccessful in accessing Coronavirus Business Interruption Loan Scheme (CBILS) funding," he explained.
"Those that have been successful in accessing CBILS funding cannot apply, although they can transfer that funding to this scheme instead."
Mr Dobinson added: "With the scheme to launch on 4 May, most telling will be how quickly the system can deliver cash payments and how receptive lenders will be to processing applications quickly and without the level of checks that have been evident for other schemes, and whether the system can cope with the number of applications anticipated.
“As advised for the previously announced business loan support, for those seeking to access the scheme we recommend approaching your existing bank or lender first as this should further fast-track the application process.”
