HM Treasury has released more details of its ‘bounce back’ Coronavirus loans system which SME estate agencies and other similarly-sized property industry companies will be able to access next week.
The initial statement on Monday revealed that Chancellor Rishi Sunak plans to offer smaller businesses a fast-track finance scheme providing loans with a 100% government-backed guarantee for lenders limited to between £2,000 and £50,000.
The loans can last for up to six years, including an interest and fees-free initial period lasting 12 months.
“Our smallest businesses are the backbone of our economy and play a vital role in their communities,” said Sunak.
“This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis.”
But the scheme is not quite as wide-ranging as first reported. Officials also published a separate explanatory note to help businesses apply for the loan, which reveals that the Bounce Back Loan scheme will have one major string attached.
Companies which have already received funding via the government’s Coronavirus Business Interruption Loan Scheme (CBILS) will not be eligible.
The CIBLS scheme was launched on the 23rd March by the Department of Business, Energy and Industrial Strategy for SME businesses with turnovers of up to £45 million, offering loans of up to £5 million, 80% of which is guaranteed by the government.
Estate agencies and other companies in the sector which have already received CBILS loans can convert them into Bounce Back Loans – which many may do as it features more generous terms – if they are small enough, but this cannot be new funding.
Agents seeking Bounce Back Funding can apply here.