Details of the new Bounce Back Loan Scheme are still yet to be agreed ahead of its launch
Key Contact: Christian Farrow
Author: Elena Visser
The Treasury is still in discussions with banks as to the final terms of the new fast-tracked loan scheme which is due to launch on Monday.
Banks have sought reassurance that they will not be penalised for any problems that may arise in the new few years as a result of the new scheme. Concern has been expressed that the simplified application process designed to get money out to businesses as quickly as possible could mean that banks are eventually criticised for supporting struggling companies against their own regulatory duties.
It is expected that the Treasury will ask banks to offer a standardised rate of interest or cap on the loans once the initial 12-month interest free period runs out.
Once the scheme has launched, it is also understood that the rules will be kept under review by the Treasury and the Financial Conduct Authority.
When launched, the scheme will offer 100% government backed loans to small businesses worth up to 25% of their turnover, up to £50,000.
The initial details of the scheme can be found here.
More than £500 million of support reaches Welsh businesses
It was announced this week that in just a few weeks, 41,000 businesses have received half a billion pounds of relief grants in Wales.
Retail, leisure and hospitality businesses occupying properties with a rateable value of between £12,001 and £51,000 have received a grant of £25,000.
A £10,000 grant has also been paid to firms, which are eligible for small business rates relief and have a rateable value of £12,000 or less.
All eligible businesses will also benefit from a year-long rates holiday.
Economy, Transport and North Wales Minister Ken Skates said that it was a testament to the hard work of the Welsh government and the incredible efforts of local authorities that half a billion pounds of vital grants has been distributed to Welsh businesses in such a short space of time.
Finance Minister Rebecca Evans said that the £500 million shares with thousands of businesses is in no small part due to the hard work of local authorities and this funding will be vital in helping businesses through the incredibly challenging weeks and months ahead.
The Welsh government’s press release can be found here.
Please see our daily updated Financial Support Guide for Businesses for further information- COVID-19 FINANCIAL SUPPORT FOR BUSINESSES
For more information on any of the points raised, please contact our corporate team.