‘Bounce-back’ loans to help small businesses survive coronavirus crisis

There will be 'no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick standard form for businesses to fill in.’

So called ‘bounce-back loans’ worth up to £50,000 are to be made available to small businesses with the Government promising to guarantee all of the risk, it was announced today 

The measures are the latest efforts to help firms navigate their way through the coronavirus crisis.

Chancellor Rishi Sunak said the Government would also pay all interest for the first 12 months.

The move was made as he acknowledged some small firms had struggled to access credit.

The idea is that by guaranteeing the full value of the loan, lenders will allow companies to borrow much-needed funds.

But he rejected calls for the Government to extend the scheme and underwrite other coronavirus loan schemes with a 100% guarantee, insisting bounce-backs ‘carefully targeted’ state support at those who needed it most.

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He told MPs: ‘I know that some small businesses are still struggling to access credit.

‘They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place.

‘If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis.’

Mr Sunak added: ‘Businesses will be able to apply for these new bounce back loans for 25 per cent of their turnover up to a maximum of £50,000 with the Government paying the interest for the first 12 months.’

Loans will be available from 9am next Monday, with ‘no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick standard form for businesses to fill in’, he finished.

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