The Chancellor, Rishi Sunak, has today – April 27 – announced a new micro loan scheme, providing a simple, quick, easy solution for businesses in need of smaller loans. Termed Bounce Back Loans, businesses will be able to apply for 25% of their turnover, up to a maximum of £50,000 with the government paying the interest for the first 12 months.
The loans will be available from banks from 9.00am Monday 4 May. There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple standard form to complete. Loans should arrive within 24 hours of approval and will be supported by 100% government guarantee.
Update Friday 1 May
This evening the Chancellor wrote to the banks setting out the 2.5% interest rate that Bounce Back loans will be offered at and the regulatory changes being made to support the scheme.
The letter also clarifies that under the Bounce Back Loan Scheme (BBLS) businesses can borrow up to £50,000, capped at 25% of turnover.
To avoid confusion the CBILS minimum loan size will rise to £50,001.
Any customer with a CBILS loan or overdraft of £50,000 or less will be able to switch that facility to a BBLS loan should they choose to do so over the next few months.
Update Monday 4 May
Bounce Back Loans are available from 9.00am today. Small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions.