Small firms are now able to access 100% taxpayer-backed loans the Chancellor announced on 27 April.
The scheme is due to start in the first week of May and it will be offering loans of up to £50,000 to businesses within days of them applying.
The Chancellor’s aim is that by increasing the level of Government backing it unlocks the backlog of credit checks that are having to be carried out by banks. In order to apply for the scheme a business must complete a two-page self-certification form online.
The loan terms mean that no capital or interest repayments will be due for one year. Instead, the government will pay the interest for the first 12 months.
With the Government underwriting the loans it removes the risk that banks will not get their money back, which Mr Sunak hopes will speed up the application process. The new “microloan scheme” would provide a “simple, quick, easy” solution, he told the Commons.
In a statement issued on behalf of the major lenders to small firms, including Barclays and Lloyds, trade body UK Finance said the “welcome changes should enable banks to provide finance to businesses more quickly”.
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