Companies from various industries were given the chance on Monday to apply for a ‘bounce back’ loan, in a scheme that could help them with funding as they grapple with business disruption from Covid-19.
It is aimed at helping small and medium-sized businesses affected by Covid-19 to access loans of up to £50,000.
Firms in the hair salon sector, which has been hit by government-enforced closures during the lockdown, are among those that are hoping to benefit from the loans.
Ian Egerton is the president of the National Hair & Beauty Federation, and owner of The Stress Exchange salon in London Bridge.
Egerton said: “For The Stress Exchange, the bounce back loan will enable us to focus on re-opening the salon and staving off costs whilst we are re-building the business given that we will incur a drop in income of about 40-50% due to social distancing.”
However, he added: “The bounce-back loan is obviously a good thing, but for most London salons it’s more about survival than ‘bouncing back’. Because London business rates are so much higher than the rest of the country, many salons in the capital missed out on the Government grants due to the fact that they pay more than the £51,000 threshold.”
Small business owners can apply to accredited lenders by filling out a online form.
The Government has agreed with lenders that an affordable flat rate of 2.5% interest will be charged on these loans. The government added that firms that have taken out a Coronavirus Business Interruption Loan of £50,000 or less can apply to have these switched over to this new scheme.
As part of the bounce back scheme, companies can borrow between £2,000 and £50,000.
The government will provide lenders with a 100% guarantee and cover the cost of any fees and interest for the borrower for the first 12 months. No repayments will be due during this period.
More details are available here: https://www.gov.uk/guidance/apply-for-a-coronavirus-bounce-back-loan
