The bounce back loans scheme will enable businesses to borrow between £2,000 and £50,000 and access the cash within days, and in some cases within 24 hours.

Loans will be interest free for the first 12 months, and businesses can apply online through a short and simple two-page standardised application form. There are no forward-looking business viability tests or eligibility criteria for the finance.

The government will provide lenders with a 100% guarantee for the loan and pay any fees and interest for the first 12 months.

Rishi Sunak, Chancellor of the Exchequer, 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 scheme will launch for applications on Monday 4 May. Firms will be able to access these loans through a network of accredited lenders.

The government has said it will work with lenders to ensure loans delivered through this scheme are advanced as quickly as possible and agree a low standardised level of interest for the remaining period of the loan.

Mike Cherry, national chairman of the Federation of Small Businesses, said: ‘This crucial new initiative should enable thousands of small businesses to access the working capital they need quickly, helping to protect the millions of jobs they provide in every part of the UK.

‘Swift delivery is now key, and we also look forward to working with government in the long-term to enhance market competition, including that provided by non-bank lenders.’

A number of other commentators echoed the call for finance to be made available quickly. Mel Stride, chair of the Treasury committee, welcomed the introduction of bounce back loans but said: ‘The success of the new scheme will still depend on the actions of lenders.

‘It is essential, therefore, that there is full and regular transparency on the progress of this scheme in order to get this further vital lending out the door fast.’

Michael Izza, ICAEW chief executive, highlighted the need for additional sources of support.

‘We are very pleased to see the government is listening to concerns and continuing to refine its business support measures where problems arise.

‘These new loans should help speed up the process of getting money to small businesses, which our members tell us has been an issue until now.

‘However, we still believe that taking on debt is not going to be suitable for some, especially smaller businesses, and we would like to see greater use of grants as part of the overall support package,’ Izza said.