The Government has launched a new loan scheme for Britain’s smallest firms following intense lobbying over fears millions of businesses would never recover from the coronavirus lockdown.
The new ‘Business Bounce Back’ loans will be 100% guaranteed by the taxpayer and will provide firms with up to 25% of their turnover up to £50,000 with no interest payable in the first year.
Chancellor Rishi Sunak has come under fire for the Coronavirus Business Interruption Loan Scheme (CBILS) designed for SMEs after businesses complained that lenders were complicating credit decisions. Under CBILS, firms with a turnover of up to £50m are allowed to apply for loans of up to £5m with 80% of the debt backed by the Government.
Small firms applying under the new scheme need to fill out just a “simple, quick, standard form”, Mr Sunak said, while banks will not need to perform any “forward-looking tests of business viability”.
Tom Gooder, Harwood Hutton’s head of business development, who has helped a number of firms secure CBILS loans, said: “This is very welcome news. A vast amount of businesses will benefit from this and get an approval of funds, which to date has been incredibly slow for the smaller businesses that do not have known bank contacts to approach.
“Having assisted clients who are wanting to borrow less than £50,000, anything that can speed up receiving approval and therefore cash to those who desperately need it is very positive.”
For more details about the Bounce-Back scheme, click here
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