Could this recovery loan scheme help your business grow out of Covid?
Launched on 6 April 2021, the Recovery Loan Scheme has been set up to support access to finance for businesses as they grow and recover following the coronavirus pandemic.
The scheme is open to any business that has been affected by the pandemic and the money can be used for any legitimate business purpose, including managing cashflow.
It will help businesses of any size access loans of between £25,000 and £10 million. Business can also apply for asset financing deals of between £1,000 and £10 million.
The loan amount and other terms will be decided by participating lenders, but the government will guarantee 80% of the finance. This means that borrowers should benefit from improved access and better rates.
However, you must be able to prove that you can afford to take out additional debt finance. And, as the borrower, you will still be 100% liable for any debt.
One of the biggest benefits of the Recovery Loan Scheme is that no personal guarantees will be taken on smaller loans up to £250,000, and a borrower’s principal private residence cannot be taken as security.
Am I eligible?
You can apply for a loan if your business is trading in the UK and:
- Would be viable were it not for the pandemic
- Has been adversely impacted by the pandemic
- Is not in collective insolvency proceedings
You could still be eligible for the scheme even if you’ve already received a Bounce Back Loan or a Coronavirus Business Interruption Loan. However, the amount borrowed under any existing scheme may affect the amount that you can borrow under the Recovery Loan Scheme.
Businesses from any sector can apply for the money, except:
- Banks, building societies, insurers and reinsurers
- Public-sector bodies
- State-funded primary and secondary schools
Want advice on business finance or recovery? Speak to one of our experts today. Call: 0808 281 0303.