Welcome to our latest Policy Update. In these updates, The Entrepreneurs Network focuses on recent policy development due to COVID-19 and sets out (nearly) everything an entrepreneur needs to know about the topic. If you’re joining us for the first time, you can read our past updates here.

The Government has responded to concerns from SMEs who have faced difficulty in accessing the Coronavirus Business Interruption Loans Scheme (CBILS) by announcing new ‘Bounce Back Loans’. In this update, we’ll explain how the scheme could help your business.

Bounce Back Loans

As of next week (Monday 9am), small businesses will be able to apply online using ‘a short, simple form’ for Bounce Back Loans of up to £50,000 or 25% of turnover, whatever is lower.

Unlike CBILS, Bounce Back Loans will come with a 100% guarantee for lenders. As a result, loan applications that may have been rejected by banks under CBILS are likely to be accepted.

Businesses will not have to pay fees or interest during the first 12 months, and no repayments are due during this period.

In order to ensure as many businesses can access the loan as possible, the government has announced there will be “no forward-looking tests of business viability; no complex eligibility criteria”. The aim is to ensure a faster process for approval. The Chancellor has stated that once a loan is approved, most firms should expect the funds to arrive within 24 hours.

For more information on the Government’s Bounce Back Loans, you can read HM Treasury’s summary of the scheme here.