New small business bounce back loans 100% government backed

by Property118.com News Team

9:41 AM, 28th April 2020
About 7 months ago

New small business bounce back loans 100% government backed

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New small business bounce back loans 100% government backed

The government has announced that a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders is designed to benefit small businesses.

The loans will be interest free and capital repayment free for the first 12 months and the simplified application forms will be self certified subject to not committing fraud. The criteria for eligibility has still not been released, but applications will be accepted from 4th May.

Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans from £2,000 up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.

The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.

The Chancellor of the Exchequer, Rishi Sunak, 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.”

Business Secretary Alok Sharma said: “Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover.

“This rapid loan scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.”

The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.

The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.


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Comments

Darren Peters

10:16 AM, 28th April 2020
About 7 months ago

What a lovely deal for the banks. They have no incentive to apply due diligence to the loans since the govt (taxpayer again!) has got their backs. After the first year, the banks will charge interest. Moral hazard once again, heads the banks win, tails the taxpayer loses.

The govt should lend the money direct so the taxpayer benefits from the interest in the future. It's going to be printing lots anyway to pay for the mess. Or it should strongarm the banks.

moneymanager

12:23 PM, 28th April 2020
About 7 months ago

Great, "create the costly problem for you and provide the profitable solution for us"; looks like another "false flag op." to me.

john mcghee

16:44 PM, 2nd May 2020
About 7 months ago

I agree moneymanager, another offer to help landlords accrue more debt.
We have tenants not paying rent due to covid 19 and we are offered loans we cant afford because we have nothing coming in.
False start again.

Lancelot

17:48 PM, 4th May 2020
About 7 months ago

Do we really think small business bounce-back loans of 25% turnover will be available to landlords?

I might be wrong, but HMRC don't view us as a business.

Does anyone have any experience?


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