What’s happening with Recovery Loans?
Recovery Loans are the last example of pandemic support, but will disappear on the 30th June 2022. If you’re still pondering whether to apply, NOW is the time to do so, as the end date isn’t just when applications close, but the date by which applications must have been credit approved!
We’ve been advised by our finance contacts that the process from application to credit approval takes approximately two weeks, so your effective deadline for a Recovery Loan is the 15th June at the latest.
Similarly, we understand that two lenders have now withdrawn from the market, as they’ve used up the funds they’d allocated to the scheme. This is more likely to happen with other lenders as we get closer to the June expiry, reducing your options still further.
Why look at a Recovery Loan?
Launched as a successor to Bounce Back Loans and CBILS, a Recovery Loan is a good option for businesses who need additional funding.
- No personal guarantees under £250k, and limited to 30% for loans up to £2mill.
- Maximum interest rate they are able to charge is 14.99%.
- Multiple uses of funds.
- Can be obtained in conjunction with a CBILS and Bounce Back Loans.
What Information will you need to produce?
The starting list we’ve been given by our finance contacts is as follows:
- Last set of full and filed accounts
- Current P&L and Balance sheet
- A debt schedule
- How much you need and purpose of funds
- 6 months business bank statements
- How many staff you have.
- How COVID effected the business, and how the business is bouncing back
We can obviously help you pull this pack together if you’d like us to do so, just get in touch.
If you’ve been unsuccessful with an initial Recovery Loan application, perhaps through your existing bank, there is nothing to stop you applying to another lender. This was more difficult when the scheme launched, but now it’s much easier, so don’t let an initial rejection put you off.
As ever, if you have any questions, or if you’d like to chat to one of our finance contacts, please get in touch.