What is the new Recovery Loan Scheme?
As part of the Budget announcement, Rishi Sunak announced that the Bounce Back Loan and Coronavirus Business Interruption Loan schemes will end as planned on 31 March 2021. These schemes will be replaced by the new Recovery Loan Scheme.
The Recovery Loan Scheme will allow businesses of any size to obtain loans from £25,000 up to £10 million. The scheme will launch on 6 April 2021 and be open until 31 December 2021.
To be eligible for the Recovery Loan Scheme, your business needs to be trading in the UK and must demonstrate that it meets the following criteria:
Is viable or would be viable were it not for the pandemic.
Has been impacted by the coronavirus pandemic.
Is not in collective insolvency proceedings.
The following types of finance will be available:
Loans will be available between £25,001 and £10 million with terms of up to 6 years.
Overdrafts will also be available between £25,001 and £10 million but terms will be up to 3 years.
Invoice and asset financing will be available between £1,000 and £10 million per business, with terms of up to 6 years for asset financing and up to 3 years for invoice financing.
The loans will be guaranteed by the Government up to 80% of the value of the loan and no personal guarantees will be taken on loans up to £250,000. The Recovery Loan Scheme will also not allow the borrower’s principal private residence to be given as security.
Businesses that have already received a loan under either of the existing loan schemes will still be able to apply for this new scheme as long as they meet the other eligibility criteria. It has also been confirmed that the loans can be used for any legitimate business purpose, which includes growth and investment.
Further details on accredited lenders and the application process will be released in due course.
If you have any questions on the Recovery Loan Scheme, please get in touch with your usual contact. You can find contact details on the Our People section of the website. Alternatively, call 0330 024 0888 or email email@example.com
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