UK Indian-origin finance minister Rishi Sunak on Monday unveiled a 100 per cent state-backed ‘Bounce Back Loan Scheme’ for the country’s small businesses to help them tide through the coronavirus pandemic lockdown.

The UK Chancellor of the Exchequer told the House of Commons that the new fast-track finance scheme, to open from next Monday, would help bolster the existing package of support available to crisis-hit UK businesses. Under the scheme, qualifying small businesses can apply online to borrow between 2,000 pounds and 50,000 pounds as interest-free loans for the first 12 months.

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Our smallest businesses are the backbone of our economy and play a vital role in their communities. This new rapid loan scheme will help ensure they get the finance they need quickly to help survive this crisis,” Sunak further added.

“This is in addition to business grants, tax deferrals, and the job retention scheme, which are already helping to support hundreds of thousands of small businesses,” he said.

Last week, Sunak has confirmed that it was considering offering 100 per cent guarantees on loans up to 25,000 pounds for small firms.

Loans to larger businesses under the coronavirus business interruption loans scheme (CBILS) will continue to get 80 per cent backing.

The CBILS provide loans of up to £5m for companies with a turnover of less than £45m.

The scheme has been designed to ensure that small firms who need vital cash injections to keep operating can get finance in a matter of days. It comes alongside the 6 billion pounds awarded in business grants, supporting 4 million jobs through the job retention scheme and generous tax deferrals supporting hundreds of thousands of firms, the UK’s Treasury Department said.

It said it had been consulting extensively with business representatives on the design of the new scheme, which will provide lenders with a 100 per cent guarantee for the loan and pay any fees and interest for the first 12 months. No repayments will be due during the first 12 months.

The loans are expected to be easy to apply for through a short, standardised online application, and they should reach businesses within days providing immediate support to those that need it as easily as possible.

The Coronavirus Job Retention Scheme, which sees the government pay furloughed employees 80 per cent of their wages up to a maximum of 2,500 pounds, will now continue until the end of June.

Last month, Sunak announced that the UK government would pay 80 per cent of wages for employees not working, up to 2,500 pounds a month.

Business groups and union leaders held discussions with the Chancellor to push for help to pay wages and prevent businesses from collapsing and wiping out thousands of jobs.

(With inputs from agency)