COVID-19: bounce back loans announced

Chancellor Rishi Sunak has today announced a new Bounce Back Loan Scheme for small businesses, with the system going live in a matter of days.

In summary:

• small businesses will be able to borrow loans in line with 25% of its turnover, up to a limit £50,000

• the loans are to be 100% guaranteed by the Government

• interest charges for the next 12 months will be covered by the Governmemt

• no repayments will be due in the first 12 months

• the loans are expected to be easy to apply for online

• the businesses should received the loan within days of applying

Although these loans are new debt for a business, this new initiative should ease the short-term capital challenges that businesses are facing in the current climate, whilst providing time to get back “on their feet” before any repayments fall due.

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