Can bounce-back loans vitalise Northampton's high street after lockdown ends?

More than 69,000 struggling UK businesses have reportedly received one of the new government-backed loans rolled out earlier this week.

The scheme - known widely as a 'bounce-back loan' - is designed as a government-backed inexpensive loan by banks and lenders to revitalise businesses during and after the lockdown.

The scheme offers loans worth up to £50,000 at an interest rate of 2.5 per cent. The first 12 months are payment and interest-free, and more than 170,000 applications have been submitted since Monday morning.

The question for many business owners will be how to use the money - should it be used to pay overheads and stay afloat during the lockdown? Or to develop a new aspect of the business to survive, such as a website and an online service?

Sarah Clark owns the "A Dancers World" clothing shop on Wellingborough Road and had to refund thousands of pounds worth of orders once the lockdown began.

Now, she is planning to use her loan to relaunch after the lockdown with a mobile fitting service to see customers at schools and venues.

She said: "I was due to leave my premises at the end of last month, but obviously that's had to stop.

"I've got to use the loan to revitalise the business when we eventually move but also to cover my loss of income in the meantime.

"But I think it would be stupid not to use it for both. If I didn't have this loan I would have to think about cutting back on staff when I come back."

It a month after central Government rolled out the Covid-19 business relief grant to stay afloat during the lockdown, which more than 1,800 businesses in Northampton received.

However, many businesses say this grant only went so far and has led them to consider the new loan.

Natalie Faulkner, who runs the Beauty With Inn salon in St James, said: "The loan will especially help us when we have to reopen again.

"It's not like we'll be able to come straight back at full capacity. We probably won't be able to offer all our slots throughout the day anymore. You think how on a busy day on a weekend you will have a full salon of women with their children. That will have to stop.

"The loan will help us cover our costs when we reopen and even extra costs like finding PPE for all of our staff."

Even before the lockdown, internet shopping and declining footfall was having an impact of Northampton's shops. Meanwhile, back-of-office businesses have had to adapt to working from home and or furlough staff entirely.

It is hoped the bounce-back loans can be used by businesses to return from the lockdown with a bang and funding for fresh ideas.

But if it only goes far enough to keep them afloat until the outbreak relaxes, they may be left struggling to find adequate business in a world that will still take months to return to normal.