In the 2021 budget the chancellor announced a new government supported loan scheme – The Recovery Loan Scheme.
The scheme is due to be launched from the 6th April 2021 and continue to operate until the end of December 2021.
The Recovery Loan Scheme will guarantee up to 80% of the loan capital, to allow businesses the chance to bounce back following the lockdowns and difficulties faced by all businesses due to the COVID-19 pandemic.
The Recovery Loan Scheme will cover;
- A facility of up to £10m per business with minimum funding is from only £1,000 for asset & invoice finance and £25,001 for loans and overdrafts.
- Most commercial finance products will sit within the scheme, since the introduction of CBILS and BBLS the range of lenders accredited by the British Business Bank has grown exponentially.
- There are no limits to the business turnover within the scheme.
- Loans and asset finance will be offered up to a six year term, invoice finance and overdraft facilities will be limited to three years.
- Government will not be supporting businesses by covering repayments, there will be a guarantee provided to the lender of up to 80% of the debt.
- Lenders will underwrite the loans themselves, so while there is no restriction with businesses which have taken CBILS or BBLS debt, the repayments of these loans will be taken into account.
- Personal guarantees from directors will not be charged over personal residences and will be optional (by the lender!) for loans under £250,000.
As more information becomes available about the Recovery Loan Scheme we’ll update this page to keep you up to date with all the funding your business needs.