Rishi Sunak, Chancellor of the Exchequer has announced an addition to existing support measures that have been deployed by Government for businesses. This latest scheme offers small businesses “fast track finance” through loans of up to £50,000 with no repayments or interest for the first 12 months. The loans will also be 100% guaranteed by Government. There will be a maximum loan term of six years and the Government will work with lenders to ensure low rates of interest for the remaining term.
Companies can apply for loans of up to 25% of their annual turnover, so targeting enterprises turning over £200,000 or less. Application is made through a short, online, standardised process with the offer and transfer of funds theoretically within days.
This latest measure comes in addition to grants already announced, income tax and VAT payment deferrals and the job retention scheme.
Martyn Dobinson, Partner, Saffery Champness, and a member of the firm’s Landed Estates and Rural Business Group, says: “This is welcome news for smaller enterprises who will be able to access amounts of between £2,000 and £50,000 on an interest free, no repayment basis for the first 12 months. It will throw a lifeline to many smaller rural businesses who have been unsuccessful in accessing CBILS funding. Those that have been successful in accessing CBILS funding cannot apply, although they can transfer that funding to this scheme instead. With the scheme to launch on 4 May, most telling will be how quickly the system can deliver cash payments and how receptive lenders will be to processing applications quickly and without the level of checks that have been evident for other schemes, and whether the system can cope with the number of applications anticipated.
“As advised for the previously announced business loan support, for those seeking to access the scheme we recommend approaching your existing bank or lender first as this should further fast-track the application process.”