Recovery Loan Scheme due in April
Both the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS) are due to end on the 31st March 2021. As part of the recent Budget, a combined successor scheme was announced, the Recovery Loan Scheme.
The aim for the new scheme is to support access to finance for UK Businesses as they grow and recover from the effect of the pandemic. It will enable businesses to access loans and other types of finance up to £10million, and will launch on the 6th April 2021, closing on the 31st December 2021.
Finance obtained through the scheme can be used for any legitimate business purpose, including growth and investment. The Government will guarantee 80% of the finance to the lender. Major banks including Barclays, Santander, Lloyds and Virgin Money have so far been announced as lenders, with more due to be announced before the scheme opens.
What types of finance are available?
- Term loans and overdrafts between £25,001 and £10 million per business.
- Invoice finance and asset finance between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be required on facilities up to £250,000 and a borrowers Principal Private Residence cannot be taken as security.
Who can apply?
- Your business must be trading in the UK.
- You need to show:
- The business must be viable or would have been viable if it hadn’t been for the pandemic.
- The business has been impacted by Coronavirus.
- The business is not in collective insolvency proceedings – more details to follow on this one!
You can apply even if you have already received a CBILS or BBLS loan, as long as you meet all other criteria.
Is anyone excluded?
There are very few exceptions:
- Banks, building societies, insurers and reinsurers (but not insurance brokers).
- Public-sector bodies
- State funded primary and secondary schools.
Full details of how to apply and additional lenders will be announced before the scheme launches. We’ll keep you posted!