Following the launch of the government’s Bounce Back Loans scheme on Monday, more than £2 billion in loans have been approved in just a day.
Banks including HSBC, Barclays and Lloyds participated in the scheme on its first day of launch with additional lenders being added to the list in the coming days ahead including TSB. In its opening minute, more than 200 businesses applied for the scheme.
The government’s 100% loan guarantee ensures that banks can lend the money with little risk, as long as the business can provide accurate information during the application process.
Since Monday, the government reported a total of 69,000 businesses that signed up to the scheme which will provide vital stop-gap funding for companies impacted by COVID-19 and waiting to re-open.
Up to 25% of annual turnover and a maximum of £50,000 can be borrowed with loans being approved within hours for qualifying businesses. For the first year, the loans are free with no interest needing to be paid, however following the first year, a low 2.5% interest will be set on the remaining debt.
The Bounce Back Loans initiative is just one of the many business support packages the government has announced over the last several weeks as the lockdown took its toll on every sector of the economy.
With the lockdown set to ease in the coming weeks, there is hope that the Bounce Back Loan scheme and the furlough scheme can be winded down.