Following confirmation by the Office of Budget Responsibility confirming what we all suspected – that the Coronavirus pandemic will have a significant impact on the Global economy, Chancellor Rishi Sunak announced the launch of the Bounce Back Loan Scheme (BBLS)
The scheme will provide much needed support for many small and micro business owners who were ineligible for the previously announced CBILS.
Details of the new scheme
- The new scheme will allow small businesses to borrow between £2,000 and £50,000 and access the cash, in most cases, within 24 hours of approval.
- The loans will have a 100% government guarantee and businesses can apply for a loan of up to 25% of their turnover.
- The government will also pay the interest on these loans for the first 12 months and no repayments will be due during this time.
The Chancellor has confirmed that businesses will be able to apply for the loan using a short, simple form with no complex eligibility criteria.
When will the scheme open?
The scheme will open for applications at 9am on Monday 4th May, and the loans will be available through a network of accredited lenders.
This was for many a surprising U-turn from the Chancellor, with the government previously refusing to offer a 100% government guarantee.
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. This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of
thousands of small businesses.’
The Chancellor suggested during his announcements that, without Government intervention, a quarter of businesses may have ceased trading as a result of the Coronavirus pandemic. Looking at the figures, its easy to see why;
- 1.5 million new Universal Credit applications have been received.
- Over 500,000 claims have been submitted to the Job Retention Scheme – 140,000 of which were submitted on launch day.
- Over 4 million jobs have been furloughed. [1]
If you have any queries regarding the BBLS, please contact MJB Avanti for further information, (08000) 388 799.
Source: Informanagement