New U.K. Covid-19 Company Loan Program Offers 2.5% Interest Rate

(Bloomberg) -- The U.K. government's latest program to help small businesses launches on Monday as authorities seek to get cash into companies at a faster pace.

The new Bounce Back Loans, granted by commercial banks, will offer an interest rate of 2.5% and be 100% backed by the state for as much as 50,000 pounds ($60,000). Companies that have already received money from the previous Business Interruption Loan program can switch over to the new terms.

Chancellor of the Exchequer Rishi Sunak is under pressure to do more for businesses as the coronavirus lockdown brings economic activity to a halt. Earlier programs only offered banks 80% guarantees, making them more reluctant to lend. That left many small firms on the brink of insolvency.

Separately, Prime Minister Boris Johnson is calling for a global effort to find a vaccine for the virus at a summit co-hosted by the U.K. on Monday.

Britain has pledged 388 million pounds toward funding for research into vaccines, tests and treatments. The death toll exceeds 28,000 in the country, just short of Italy's tally, which is the highest in Europe.

Read: Where Are We in the Quest for a Coronavirus Vaccine?

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