The government has announced a new loan scheme for small businesses described as "transformational" by business leaders.
Ideas that were unthinkable 6 weeks ago are becoming the new normal in the blink of an eye.
Small businesses can apply for loans which are:
1) £2000 to £50,000
2) interest and fees free in year 1
3) through accredited lenders
4) by way of a simple online 2 page application
5) backed by a government 100% guarantee scheme
6) and which will be up and running for applications from 4th May
In a move away from the previous government policy to provide only an 80% guarantee for interruption loan schemes, the Chancellor has moved to 100% government backing for these small loans (a model in use already in, for example, Switzerland).
Another significant change is that it appears there will be more emphasis on a business's viability in the past before the crisis than proving its potential future viability
The hope is is that for these small loans the process will be super streamlined applications through online forms which banks can administer very quickly.
Detail of the application criteria, procedure and standardised commercial terms for interest rates after year 1 will follow shortly.
The government's current thinking on the new scheme can be found here.
