Bounce Back Loan Scheme

Treasury written question – answered on 6th October 2020.

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Photo of Mark Tami Mark Tami Opposition Pairing Whip (Commons)

To ask the Chancellor of the Exchequer, what support he has put in place for small businesses to access bounce back loans where their banking arrangements are solely with financial institutions that do not offer those loans.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Bounce Back Loan Scheme (BBLS) was designed to ensure that the smallest businesses can access loans of up to £50,000, capped at 25% of firms’ turnover in a matter of just days. The Government is providing lenders with a 100% guarantee on each loan to give them the confidence they need to support the smallest businesses in the country, and no interest payments are due for the first 12 months. As of 20th September, over 1.2 million facilities have been approved through BBLS representing a value of more than £38bn.

The Bounce Back Loan scheme rules do not mandate that the applicant must have a business relationship with the lender in order to receive a BBLS loan. The British Business Bank has so far accredited 28 BBLS lenders, including several non-banks and alternative lenders.

The Government does not intervene in their lending decisions.

Some banks have made good on their intention to invite applications from new customers, and many of those that are still only open to existing customers are regularly reviewing that position. The Government have always made clear to lenders that they should open to new customers as soon as it is operationally possible for them to do so.

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