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27 April 2020updated 06 Oct 2020 9:45am

Sunak announces small businesses “microloan“ scheme, government to pay interest for 12 months

By Samuel Horti

Chancellor Rishi Sunak has unveiled a new “microloan” scheme for small businesses that will see the government pay the first 12 months’ interest on loans of up to £50,000.

The “bounce back loans” will let businesses borrow 25 per cent of their turnover up to a maximum of £50,000. As well as paying the interest for a year, the government will fully guarantee the loans, he said.

The loans will be available from banks starting 9am next Monday, 5 May. Most firms will receive their money within 24 hours, he said.

“There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in,” Sunak said.

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New Statesman political editor Stephen Bush believes Sunak’s decision to give small businesses guarantees that he hasn’t given larger ones is a big hint at where he’ll take British fiscal policy after the crisis. You can read his full analysis here.