Government launches new small business micro-loan scheme

28 April 2020: The Chancellor has announced a new Bounce Back Loan Scheme, allowing small businesses hit by the impact of coronavirus measures to apply for a loan of up to £50,000, with the government guaranteeing 100% of the advance.

Billed by Chancellor Rishi Sunak as a “simple, quick, easy solution for those in need of smaller loans”, businesses can apply to lenders using a two-page standard form with no forward-looking business viability tests or eligibility criteria.

According to an accompanying government press release, businesses can apply for a loan for a minimum of £2,000 up to a maximum of £50,000, or 25% of business turnover, with the government paying the interest for the first 12 months.

The scheme will open from 9am next Monday (4 May 2020), and according to the Chancellor, most loans will be paid within 24 hours of approval. Businesses will be able to access the loans through the existing network of accredited lenders.

If you are a business based in the UK that has been negatively affected by Coronavirus and was not an ‘undertaking in difficulty’ on the 31st December 2019 you will be able to apply for the loan.

You will be unable to claim for this scheme if you are already claiming funding under the Coronavirus Business Interruption Loan Scheme (CBILS). However, if you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan Scheme, you can arrange this with your lender until 4 November 2020.