Coronavirus: Chancellor Announces 100%-Backed 'Microloans'
28 Apr 2020
Today the Chancellor has announced a new type of 'microloan' for businesses which will be 100% backed by the government.
This follows weeks of lobbying from DMA and partners for greater support of businesses by the government after the struggle of many enterprises to access government help.
The 'Bounce Back Loans' will offer up to £50k or 25% of turnover, with the government paying interest for the first 12 months.
Importantly, there will be no ‘forward-looking tests’ of business viability or no ‘complex eligibility criteria’ to receive the loan - just standard ‘quick’ form. For most firms, loans should arrive within 24 hours of approval. Gov will guarantee 100% of the loan. They will be made available from 9 AM on Monday 4 May.
The chancellor announced he will not, however, give 100% guarantees for the other loan schemes.
Discussing the announcement, DMA CEO, Chris Combemale said:
'This is a welcome addition to the support offered by the government. Businesses have been in need of a simple loan with complete government backing, and the Bounce Back Loan will provide thousands of businesses with the means to keep themselves afloat.
The simplicity of the process of accessing the loan is hugely important. The DMA would like to see this quick form extended to the CBIL Scheme, even if the government cannot offer 100% guarantees for larger loans.'