From Tuesday April 6, the new financial initiative will replace the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) and its big brother CLBILS.

The Treasury has pledged to cover 80% of what banks lend if companies don’t repay their loans .

Mr Sunak said: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and, as the situation evolved, we ensured that our support continues to meet the needs of businesses.

“As we safely reopen parts of our economy, our new payback loan program will ensure businesses continue to have access to the financing they need as we emerge from this crisis.”

Businesses will be able to access loans ranging in size from £ 25,001 to a maximum of £ 10 million.

Bill and asset funding will be available from £ 1,000, according to the Treasury.

The new plan, which runs until December 31, benefits from the same government guarantee as CBILS and CLBILS, but is less generous than the 100% guarantee for BBLS.

It will be administered by the British Business Bank, with loans available through a “diverse network of accredited commercial lenders,” officials said.

Interest rates have been capped at 14.99% and ministers are urging lenders to ensure they keep rates low in an effort to ensure business owners pay less than the cap.

The payback loan program can be used as an additional loan in addition to the support received from emergency programs put in place last year.

Bounce loans were first unveiled at the end of April last year and became available to businesses days later, in early May.

With higher collateral and less stringent lender controls, rebound loans have proven to be by far the most popular of the three regimes, both in terms of number of loans issued and total amount loaned.

As of February 21, more than 1.5 million businesses had received a loan totaling £ 45.6 billion, and half a million more had applied.

The BBLS was intended to quickly channel cash from banks to small businesses, up to £ 50,000 each. The government gave a 100% guarantee on the loans to ensure that the banks were not reluctant to lend.

The Bank of England’s BBLS, CBILS, CLBILS and Covid Corporate Financing Facility have between them granted tens of billions of pounds in loans to British companies.

Business Secretary Kwasi Kwarteng said, “We are doing everything we can to support businesses as we carefully reopen our economy and reclaim our way of life.

“The launch of our new payback loan program will provide businesses with a solid foundation on which to plan, protect jobs and prepare for a safe reopening as we rebuild better after the pandemic.”