Corona Bounce Back Loan facility – Worth a Look

Dear Members

It looks as if the Government has listened to our and similar voices, and has come up with a loan scheme that 100% guarantees the loan, and low interest rates.

This one might be of interest.

 

New Loan Facility

100% government-backed guarantee

The Chancellor announced a new loan scheme for smaller businesses that will benefit from a 100% government-backed guarantee. The scheme is available for businesses affected by the coronavirus and not classed as an ‘undertaking in difficulty’ on 31 December 2019.

The initial details announced are summarised below:

  • Businesses can apply for loans between £2,000 and £50,000 but will be limited to loans not exceeding 25% of turnover.
  • Access to cash, following a successful application, should be made available within days.
  • The government will step in and repay the loan (100% guarantee) if the company is unable to meet its loan obligations.
  • The application will be a simple online form.
  • Loans will be interest-free for the first twelve months and the government will cover any other fees associated with the loan set-up.
  • No loan repayments will be required for the first year.
  • The scheme will launch for applications on Monday 4th May 2020.
  • The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and will further agree to a low standardised level of interest for the remaining period of the loan.

If banks and the government can meet these terms this would appear to be the best of the bank loan solutions to date that target support for small businesses affected by the coronavirus disruption. It will be interesting to see the criteria used by Banks to determine the fitness of businesses on 31 December 2019.

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