The CBI has welcomed the Chancellor’s newly launched, 100% Government-backed, microloan scheme for small businesses.
Businesses will be able to apply for the ‘bounce back loans’ for 25% of their turnover, up to a maximum of £50,000. For the first 12 months the interest will be paid by the Government.
The business association described the loan guarantees as ‘transformational’.
CBI director general Dame Carolyn Fairbairn said: "Sole traders, micro-firms and entrepreneurs will now have a simple route to fast finance to stay afloat, without red tape or time-consuming checks.
"Thousands of businesses could be saved by this lifeline. Banks now need to continue their work in overdrive to get the loans flowing faster."
Chancellor Rishi Sunak announced the scheme to the House of Commons on Monday, after acknowledging many small businesses are struggling to get help amid the Covid-19 crisis.
The scheme will be in place from next Monday. Businesses won’t face a viability test and the application will be to banks via a simple form. Some fraud checks will have to be completed.
However, the Chancellor said the existing Coronavirus Business Interruption Loan Scheme would remain 80% backed by the Government.
