Yesterday afternoon, Rishi Sunak, the Chancellor, announced to Parliament that from next Monday, businesses will be given access to a new, Bounce Back loans scheme for sums up to £50,000.

To facilitate the scheme, which is targeted at smaller businesse, the government is guaranteeing the loans. This should unlock the delays that have been criticised as holding back the Coronavirus Business Interruption Loan Scheme.

The new scheme should be useful for agents as there will be no interest payable for the first 12 months.

It may therefore help tide some firms over as they rebuild pipelines and income.

Here is the text of the announcement:

I know that some small businesses are still struggling to access credit.

They are, in many ways, the most exposed businesses to the impact of the coronavirus; and often find it harder to access credit in the first place.

If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through the crisis.

Some businesses will not want to take on more debt; which is why our focus has been on cash grants, tax cuts and tax deferrals. But for others, loans will be part of the answer.

So today, we are announcing a new micro loan scheme, providing a simple, quick, easy solution for those in need of smaller loans.

Businesses will be able to apply for these new Bounce Back Loans for 25% of their turnover, up to a maximum of £50,000, with the government paying the interest for the first twelve months.

My Right Honourable Friend, the Economic Secretary, and I have been in close talks with the banks, and I’m pleased to say that these loans will be available from 9am next Monday.

There will be no forward-looking tests of business viability; no complex eligibility criteria; just a simple, quick, standard form for businesses to fill in.

For most firms, loans should arrive within 24 hours of approval.

And I have decided, for this specific scheme, that the government will support lending by guaranteeing, to the lender, 100% of the loan.

Let me address this point directly Mr Speaker:

I’ve heard some calls for government to underwrite all our loan schemes with 100% guarantees.

I remain unconvinced by the case for doing that universally.

We should not ask the ordinary taxpayers of today and tomorrow to bear the entire risk of lending almost unlimited sums to businesses who may, in some cases, have very little prospect of paying those loans back – and not necessarily because of the impact of coronavirus.

So I do not think it is appropriate to provide 100% guarantees on all of our schemes.

Instead, these new Bounce Back Loans carefully target that extraordinary level of state support at those who need it most.

And the £50,000 cap balances the risk to the taxpayer with the need to support our smallest businesses.

UPDATE 11.05am 28th April

Loan terms will be up to 6 years.

No repayments will be due during the first 12 months.

The government will work with lenders to agree a low rate of interest for the remaining period of the loan.

The scheme will be delivered through a network of accredited lenders.