Now that the Autumn Statement & Spending Reviewhas been announced, we can all benefit from the knowledge that the Recovery Loan Scheme will in fact be extended by a further 6 months, until June 2022. As the last remaining form of COVID financial support, recovery loans are expected to be an essential lifeline for many UK businesses.
But what has been revealed about the Recovery Loan Scheme and what will it entail?
In this article, we explore all there is to know aboutthe 2021 Recovery Loan Scheme and the milestones it has successfully hit.
Eligibility
According to the official GOV website any business is eligible to apply for the Recovery Loan Scheme if they have the following criteria:
– The business trades in the UK
– Your business can prove it has been adversely impacted by the pandemic
– Your business is not in collective insolvency proceedings (unless located in Northern Ireland in which case different eligibility rules may apply)
Remember, any business that received support under the earlier COVID-19 loan schemes are still eligible to access funding under this scheme, so long as they meet the relevant eligibility criteria.
Scheme Features
The newly announced RLS offer any business a total of up to £10 million with a maximum of £30million per group. The amount offered, and the terms on which they are decided, are at the discretion of participating lenders involved.
According to the official advice outlined by government officials, businesses are entitled to the following:
– Term loans or overdrafts of between £25,001 and £10 million per business
– Invoice or asset finance of between £1,000 and £10 million per business
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal household cannot be taken as security. The government guarantees 80% of the finance to the lender – however, it’s important to remember that as the borrower, you are always 100% liable for the debt.
Lenders are allowed to ask for personal guarantees from directors on loans over £250,000.
Milestones Hit
Despite the take up not quite being as expected, The British Business Bank is pleased to announce that the RLS has passed a significant milestone, with a total of 76 accredited lenders now offering over £1billion to smaller UK businesses. Funds are available to any business for legitimate purposes, as they attempt to recover from the damaging effects of the pandemic.
The CEO of British Business Bank, Catherine Lewis La Torre, commented, “Businesses up and down the country are beginning to look beyond the pandemic towards the opportunities available to them in the recovery. The British Business Bank is committed to supporting smaller businesses in accessing the finance they need to grow sustainably in the future. In meeting the £1billion milestone, the Recovery Loan Scheme is demonstrating its impact by helping thousands of companies to fund their further development.”
