New 100% government backed loan scheme for small businesses
- By Ross Brinsdon (TLA)
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- 27 Apr, 2020
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Small businesses will benefit from a new fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders, the Chancellor announced today, Monday 27 April 2020.
Rishi Sunak said the new Bounce Back Loans scheme, which will provide loans of up to £50,000, would help bolster the existing package of support available to the smallest businesses affected by the coronavirus (Covid-19) pandemic.
The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days, and comes alongside the £6 billion awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms.
The government, which has been consulting extensively with business representatives about the design of the new scheme, will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.
The loans will be easy to apply for through a short, standardised online application. The loan should reach businesses within days - providing immediate support to those that need it as easily as possible. Banks should be able to offer loan applications from next Monday, 4 May 2020.
The key points of this loan are:
- businesses will be able to borrow between £2,000 and £50,000 and access the cash within days
- loan term between 12 months and 6 years
- loans will be interest free for the first 12 months, and businesses can apply online through a short and simple form
- low rates of loan for any repayments after the initial 12 months will be agreed between the UK banks and the government
https://www.gov.uk/government/news/small-businesses-boosted-by-bounce-back-loans
If you’re part of a working household that receives tax credits, you may be eligible for a new one-off payment of £500. The new payment is being introduced to provide extra support when the temporary increase in Working Tax Credit ends as planned on 5 April 2021.
You may get a one-off, tax-free payment of £500 if, on 2 March 2021, you were getting either:
- Working Tax Credit
- Child Tax Credit and were eligible for Working Tax Credit but you did not get a payment because your income is too high to get Working Tax Credit payments
You do not need to contact HMRC or apply for the payment. HMRC will contact you by text message or letter in April 2021 to confirm you are eligible.
If you are eligible, you should get your payment direct to your bank account by 23 April 2021. HMRC have confirmed that you will not see the payment on the online tax credit service.
The payment is non-taxable and will not affect your benefits. You do not need to declare it as income for Self-Assessment tax returns or for tax credit claims and renewals.
