Three Bounce Back Loans were issued every minute since they were launched in May 2020 as emergency loans provided almost £180bn in total lending to businesses
The existing loan structure is set to be replaced in April with a new Coronavirus Recovery Loan Scheme although application details have still not been released. Applications will be open from 6 April, the Treasury has confirmed.
The Recovery Loan Scheme will run until 31 December 2021 and will ensure lenders continue to have the confidence to provide support, and viable businesses can access government-backed finance throughout 2021 following the disruption of the pandemic.
This scheme will operate UK-wide, providing an 80% guarantee to lenders for term loans, overdrafts, and invoice and asset finance. The maximum loan size across all products is £10m; the minimum loan size is £25,000 for term loans and overdrafts, and £1,000 for invoice and asset finance.
As the initial loan schemes close, the Treasury’s final monthly update on its emergency loan schemes – the Bounce Back Loan Scheme, Coronavirus Large Business Interruption Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Covid Corporate Financing Facility – show that more than 1.6 million firms benefited from support to keep them trading and protect jobs and livelihoods.
In total, these schemes have provided almost £180bn worth of lending to date, supporting over a quarter of businesses in the UK. The Covid Corporate Financing Facility alone has directly supported companies that employ almost 2.5 million people in the UK, including those in the car industry, travel, hospitality, and high street stores.
Bounce Back Loans alone accounted for £46.5bn worth of lending to an estimated 1.5m businesses, targeted primarily at SMEs.
Chancellor Rishi Sunak said: ‘I said we would do whatever it takes to protect jobs and livelihoods and that is exactly what we have done.
‘I’m delighted that our Bounce Back Loan scheme worked so effectively that it issued three loans every minute since its launch last May. That means every 20 seconds a hardworking small business owner benefited from this support.
‘We’ll continue to protect jobs through our new Recovery Loan Scheme – part of our wider Plan for Jobs – as we move out of this crisis.’
Craig Beaumont, chief of external affairs at the Federation of Small Businesses (FSB), said: ‘1.6 million small businesses have now been helped to keep going through an awful year by securing Bounce Back Loans. As the unlock takes place, the economic recovery will rely on the successor scheme to fire on all cylinders.’