Our friends at Coadec sent out the news that Chancellor Rishi Sunak has announced a new Bounce Back Loan Scheme, which will offer access to loans worth 25% of a startups' turnover, up to a maximum of £50,000.
This scheme is likely to be more suitable for bootstrapped startups and smaller profit-generating companies, which are unable to access the Future Fund due to the £250k minimum raise threshold.
The Bounce Back Loan Scheme has come in response to widespread reports that banks are reluctant to lend to smaller companies under the Coronavirus Business Interruption Loan Scheme (CBILS) because they are still liable for 20% of the risk.
For this scheme, the Government will be fully guaranteeing loans, and they are targeted at the smallest businesses. For you it means,
As a business you will be able to borrow between £2,000 and £50,000 and should be able access the cash within days
As a business you can apply for loans worth 25% of turnover, up to a maximum of £50,000
Loans will be interest free for the first 12 months, and businesses will be able apply online through a short and simple form
The big difference is that you will not have to face the stringent ‘viability tests’ which seemed to be restricting for startups with the CBILS loans. Do note that some fraud checks will have to be completed.
The scheme will open on Monday 4th May and companies will be able to apply through the British Business Banks’ network of accredited lenders.
Want to find out which scheme is best for you? Or have questions about any of them? Dom Hallas, Exec Director at Coadec will be answering your questions tomorrow (Wednesday 29th April) at midday. Sign up here