(Bloomberg) --
Chancellor of the Exchequer Rishi Sunak announced a loan program to support the smallest businesses in the U.K., which will be interest-free for a year and completely underwritten by the government.
Since his March 12 Budget, Sunak has announced a series of unprecedented measures to support companies and individuals during the coronavirus lockdown, including loans 80% underwritten by the government. But businesses complained banks were reluctant to agree such loans and were slow to deliver, particularly causing problems for small businesses.
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“I know that some small businesses are still struggling to access credit,” Sunak told Parliament on Monday. “They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place. If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis.”
The “Bounce-Back” loans will be limited to 50,000 pounds ($62,000) or 25% of the company's turnover. They'll be available from May 4, and Sunak said they should be paid within 24 hours of application. Fees and interest for the first year will be paid by the government.
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