Small businesses across Penrith and The Border will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders.
Chancellor Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.
The Government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.
The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days- providing immediate support to those that need it as easily as possible.
Commenting Dr Neil Hudson, the MP for Penrith and The Border said: “I’m really pleased that the Government has put this scheme into place which will give vital help to our important small businesses here in Penrith and The Border, across Cumbria and the UK.
“Small businesses are vital in ensuring our communities thrive and will be crucial in maintaining and creating jobs and securing economic growth as we get through this Covid-19 pandemic.”
The Chancellor of the Exchequer, Rishi Sunak, said:
“Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.
The government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.
Notes
The Government’s Covid-19 support schemes have provided over £15 billion for business in just a few weeks and have put in place:
- A job retention scheme - more than 500,000 claims have been made to the value of £4.5 billion
- business grants - half a million business properties have benefitted from £6 billion of business grants
- the Coronavirus Business Interruption Loan Scheme - with over 20,000 loans
- the Covid Corporate Financing Facility, which has provided over £14 billion for larger firms
- generous VAT deferrals worth billions of pounds
- scrapped businesses rates
- covering the cost of statutory sick pay
- the new scheme will run alongside the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS)
- The Government is also taking additional steps on the Coronavirus Business Interruption Loan Scheme (CBILS) to ensure that lenders have the confidence they need to process finance applications quickly, including removing the per lender portfolio cap for the government guarantee, and changing the viability tests that so that all banks will need to assess is whether a business was viable pre COVID-19
To find out what support your business may be eligible for, please visit: https://www.gov.uk/business-coronavirus-support-finder