Chancellor Rishi Sunak has unveiled a ‘Bounce Back Loans scheme’ offering loans up to £50,000 interest free for the first 12 months.
The amount that can be borrowed is capped at 25% of turnover, while it will open on 4 May.
Rishi Sunak, the Chancellor, said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.”
Businesses can apply through an online form, with cash being distributed to successful applications within 24 hours.
Stephen Jones, chief executive of UK Finance, said: “Finance providers are committed to helping small and medium sized businesses through these tough times and the new Bounce Back Loans scheme (BBLS) announced by the Chancellor today will make it simpler and faster for smaller businesses to apply through an online form and get the loans they need.
“The terms of this new scheme and the changes being made by the authorities to existing lending rules to support its launch will enable lenders approved by the British Business Bank to process these loan applications based on a short, simple online application form and for lenders to assess the applications at pace without the need for forward looking financial plans.
“The BBLS will sit alongside a broad package of support that lenders are providing SMEs including through the government’s CBIL scheme, the CLBIL scheme, as well as capital repayment holidays, extended overdrafts and asset-based finance.
“Lenders approved by the British Business Bank are now working non-stop to get the new scheme up and running from Monday. Further details will be provided for those businesses who wish to apply for a bounce back loan from the end of this week.”
This post has originally been featured in Property Wire.