Launching 6 April to provide continued support to businesses as they look to recover from the damage caused by the COVID-19 pandemic
The Recovery Loan Scheme is to be launched from 6 April 2021 and will run through to 31 December 2021 to provide continued support to UK businesses as they look to recover from the damage caused by the COVID-19 pandemic.
This scheme will effectively replace the existing COVID-19 loan schemes, which are due to close at the end of March. The UK Government will guarantee 80% of the finance to lenders.
Up to £10m is available to be accessed dependent on eligibility. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
There is no turnover restriction for businesses accessing the scheme.
Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities.
Finance terms will be up to 6 years for term loans and asset finance, and up to 3 years for overdrafts and invoice finance facilities.
Businesses will be required to meet the costs of interest payments and any associated fees from the outset – there will be no holiday periods, unlike the current schemes in place.
Businesses who have taken out a CBILS or a BBLS loan facility will also be able to access the new scheme, although the maximum they will be allowed to borrow will depend on their lender’s assessment and scheme requirements.
Lenders will be required to undertake credit and fraud checks for all applicants. When making their assessment, lenders may overlook concerns over short-to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.