Small businesses in Cumbria are being made aware of a new fast-track finance scheme, which is providing loans with a 100 per cent government-backed guarantee for those lending the money.
Chancellor Rishi Sunak launched the Bounce Back Loans scheme on Monday, 27 April. It provides loans of between £2,000 and £50,000 and is aimed at helping the UK’s smallest firms.
It is designed to provide urgent support to businesses needing a cash injection to keep operating, with decisions made very quickly and funding provided in a matter of days.
The government will provide those lending the money with a 100 per cent guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be required during the first 12 months and businesses can apply online through a short, simple application form.
Jo Lappin, Chair of the Business and Economic Response and Recovery Group (BERRG) of the Local Resilience Forum, which is responsible for developing the county’s business and economy response to COVID-19, said: “These are incredibly difficult times for businesses of all sizes with many seriously struggling with their cash flow.
“We know that many Cumbrian businesses have taken advantage of the Government’s Job Retention Scheme and furloughed some of their staff. The first payments from the scheme are due imminently, which will hopefully help many businesses cash flow.
“The Bounce Back Loans Scheme is another helpful addition to the range of support available and might be particularly valuable to our smaller businesses, such as sole traders, micro-firms and entrepreneurs.
“These loans are designed to provide fast access to funds at a lower interest rate to help smaller businesses address the cash flow issues that they might be facing. “Clearly, this is a loan that will need to be paid back and as such we would encourage businesses to look into this new source of funding but at the same time seek advice from their own bank or accountant.”
Commenting Dr Neil Hudson, the MP for Penrith and The Border said: “I’m really pleased that the Government has put this scheme into place which will give vital help to our important small businesses here in Penrith and The Border, across Cumbria and the UK.
“Small businesses are vital in ensuring our communities thrive and will be crucial in maintaining and creating jobs and securing economic growth as we get through this Covid-19 pandemic.”
The Chancellor of the Exchequer, Rishi Sunak, said: “Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.
“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses.”
The loans will be available from 9am on Monday, May 4 and firms will be able to access them through a network of accredited lenders.
The government says it will work with lenders to ensure loans delivered through the scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.