The Bounce Back Loan Scheme will enable small businesses affected by the pandemic to borrow between £2,000 and £50,000 in an initiative described by the Chancellor as “an easy solution for those in need of smaller loans”.
Businesses will only need to apply through a short, standardised online application and will get the loans within 24 hours of approval.
“There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in,” said Sunak.
Businesses can apply for 25% of their turnover and the government will pay the interest for the first 12 months.
Sunak highlighted how the £50,000 cap would reduce the risk to the taxpayer while still helping the smallest businesses.
The Bounce Bank loan scheme joins other government initiatives for coronavirus-hit businesses, such as the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Businesses will be unable to claim if they have an existing loan. There is also no reference to any personal liability.