Small businesses will be eligible for ‘bounce back loans’ worth up to 25 per cent of the company’s turnover, up to a maximum loan of £50,000.

The government will pay the interest on the loan for the first 12 months and the government will guarantee 100 per cent of the loans.

The scheme will be available from Monday 4 May and the Chancellor said that there would be no forward looking eligibility tests but instead a ‘simple, quick, standard’ application form.

The loans will should reach businesses within 24 hours of approval.

Chancellor Rishi Sunak said: “Around half a million employers have already applied for help to pay the wages of over four million furloughed jobs. 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.”