Small businesses in Wales will benefit from a new fast-track finance scheme providing loans with a 100% UK Government-backed guarantee for lenders.
The new Bounce Back Loans scheme, which will provide loans of up to £50,000, will help bolster the existing package of support available to the smallest businesses affected by the coronavirus pandemic.
Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
The scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.
The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.
The UK Government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.
The loans will be easy to apply for through a short, standardised online application. These should reach businesses within days- providing immediate support to those that need it as easily as possible.
The Chancellor of the Exchequer, Rishi Sunak, said:
“Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
Secretary of State for Wales Simon Hart said:
“The UK Government understands that small businesses in Wales and across the UK will have been hit hard by the coronavirus pandemic.
“That’s why we have introduced a package of measures to support those businesses who are central to our communities. This includes this new loan scheme which will grant them faster access to vital funding sources, enabling them to better deal with the economic hardship caused by the virus.”
Heather Myers, Chief Executive, South and Mid Wales Chambers of Commerce said:
“98% of business in Wales are SME’s and we have heard how hard it has been for them to access the funding support they need, with phonelines and funds in huge demand. This is welcome news from the Chancellor because it throws a lifeline to getting support to our smaller companies. This new funding route, where small companies can apply quickly and get a fast decision, will be crucial to those who have struggled to get a CBILS or a Development Bank for Wales loan.”
Business Secretary Alok Sharma said:
“Our small businesses are vital in ensuring our communities thrive and will be crucial in creating jobs and securing economic growth as we recover.
“The Bounce Back Loans scheme offers additional protection so small companies across the country can get access to the finance they need immediately, as part of the unprecedented package of support we have put in place.”
The UK Government will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.