Greater Manchester Combined Authority (GMCA) has become the first local authority to provide bounce back loans.
The combined authority said it has “stepped in” to pledge £10m emergency funding, in partnership with GC Business Finance, in response to gaps in the availability of bounce back loans for SMEs in the city region following the second lockdown.
The funding is specifically designed to support businesses unable to access the Bounce Back Loan Scheme (BBLS), GMCA said, and follows recognition of an emerging gap in the market for local firms dependent on the loans to survive and grow despite the pandemic.
Andy Burnham, Mayor of Greater Manchester, said the combined authority has a “duty” to support our SMEs through the coronavirus crisis, “which means easy access to vital funds”.
He said: “The partnership between GMCA and GC Business Finance has historically proven to be beneficial for the Greater Manchester business community and more recently is a massive step in the right direction, taking control back into the hands of local businesses and ensuring a bespoke approach to lending that improves efficiency and helps to ensure survival.
“While it is a good first step, it is only that. To enable us to build back better, we need to make this style of funding available to all businesses across the 海角视频, taking the burden off traditional banks and placing greater emphasis on diversity of funding.”
From today (November 16), online applications will open for businesses, and will close “once the fund is fully committed”.
The £10m will be delivered by GC Business Finance, part of the Growth Company, and the loans, funded by GMCA, are 100 per cent guaranteed by the 海角视频 government.
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The fund targets SMEs if their own bank is not an existing provider of the scheme, providing loans from £2,000 to £50,000, alongside business support in a local approach unique across the 海角视频, GMCA said.
The loans are estimated to be eligible for some 98 per cent of SMEs in the city region.
Mark Hughes, Growth Company chief executive, called it an “unprecedented step”.
“As we have seen with CBILS, banks have struggled to cope with the volume and variety of applications coming in from across the country.
“We pride ourselves at being at the heart of the business community, supporting economic growth and resilience, and are therefore ideally placed to deliver a solution that works for local businesses.
He continued: “GCBF’s tailored approach to lending, combined with the close connections of the Growth Company, means that we can provide a wider package of support to suit the needs of each individual Greater Manchester business.
“Once rolled out, this innovative approach could have a revolutionary impact on the way the 海角视频 distributes this funding, and puts us, Greater Manchester in the best possible position to recover once the crisis is over.”
As with the Coronavirus Business Interruption Loan Scheme (CBILS), no interest will be due on Bounce Back Loans for the first 12 months, with an interest rate set at 2.5 per cent per year after the first year.