4th May 2020
Today (4th May 2020) sees the release of a new loan scheme to help Small and Medium–sized businesses.
The scheme allows businesses to borrow between £2,000 and £50,000 and the loans are 100% guaranteed by the Government.
Please note that for each business, they cannot borrow more than 25% of their turnover so if your turnover last year was £100,000 your loan will be restricted to £25,000.
As with other loans made available by the Government, there are no set-up fees or interest charged to your business in the first 12 months. The Government are paying the set-up fees and interest on your behalf in the first year.
Loans can be taken out for terms up to 6 years and there are no repayments due in the first year.
Interest rates are low (reported to be 2.5% on average) but this may vary by bank.
To qualify, the business must be based in the UK. If your business has already taken out a Coronavirus Business Interruption Loan (CBIL) this can be transferred to the Bounce Back Loan Scheme as long as the initial loan was below £50,000. This option is available until 4th November 2020. Please liaise with your lender to discuss this option.
The business must also have been impacted by Coronavirus and not in trading difficulties and classified as an ‘undertaking in difficulty’ as at 31st December 2019.
The scheme can be accessed here – https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan