Small firms are to get access to 100% taxpayer-backed loans after they raised concerns about slow access to existing coronavirus rescue schemes.
Chancellor Rishi Sunak told the House of Commons the scheme would start next week, offering firms up to £50,000 within days of applying.
It aims to unlock a backlog of credit checks by banks amid fears that many small businesses could fold before getting loans.
The scheme requires filling in a two-page self-certification form online.
The loan terms mean that no capital or interest repayments will be due for one year. Instead, the government will pay the interest for the first 12 months.
Banks have come under fire for delays in handing out loans, but have blamed the workload need to complete the necessary credit checks and a shortage of staff.
Mr Sunak told the House of Commons: “The new ‘microloan scheme’ would provide a simple, quick and easy solution”.
Businesses will not even need to provide proof of turnover in the application process.
He (Sunak) said: “I know some small businesses are still struggling to access credit – they are in many ways the most exposed to the effects of the coronavirus pandemic”.
Companies have complained about struggling to prove their future potential with so much uncertainty over the economic environment.