Coronavirus Small Business Bounce-Back Loan
On the 27th of April 2020, the Government announced a new small business bounce back loan scheme. This scheme will provide a 100% government backed loan, interest free for the first twelve months, up to 25% of the business turnover with the maximum loan value of £50,000.
This loan scheme will be in place by the following Monday with the applications made by a simple form and not subject to viability test, although fraud checks will be made on the application.
There have been widespread reports of the loans under the Coronavirus Business Interruption Loan Scheme (CBILS) were slow being made or applications being rejected by banks, this was largely due to the government only guaranteeing 80% of the loans being made.
These concerns would seem to have been addressed by the announcement of the bounce-back loan on the 27th of April. It remains to be seen how quickly the loans can be made to small business requiring funding to get through the current crisis and what the application process is like.
We welcome the scheme that has been announced although there is some disappointment that help being given to small business owners that operate through a limited company is through a repayable loan whereas self employed and employed have been given taxable grants and furloughed wages respectively. There does still seem to be gaps in the help given to the UK economy in response to the Coronavirus pandemic.