The Recovery Loan Scheme

You can apply to the scheme if Covid-19 has affected your business. You can use the finance for any legitimate business purpose – including managing cashflow, investment and growth. However, you must be able to afford to take out additional debt finance for these purposes.

The Covid-19 Recovery Loan Scheme

The Recovery Loan Scheme is the government scheme to help UK businesses of any size affected by Covid-19 to support them to access loans and other kinds of finance so that they can recover after the pandemic and transition period. The scheme has been extended and is open till 30 June 2022 for applications.

Up to £10 million is available per business

The actual amount offered and the terms are at the discretion of participating lenders

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.

Recovery Loans are available through a network of accredited lenders and can be used for any legitimate business purpose, such as managing cash flow, investment and growth.

Will my business be eligible for the Recovery Loan Scheme?

You can apply for a Recovery Loan if your business is trading in the UK and you will need to show that your business:

  • would be viable if were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings

Businesses that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other eligibility criteria.

What can the Recovery Loan Scheme be used for?

  • Access cash flow
  • Grow your business
  • Purchase equipment
  • Pay a one-off cost
  • Help with payroll
  • Invest in marketing

Who cannot apply

Businesses from any sector can apply, except:

  • Banks, building societies, insurers and reinsurers (but not insurance brokers)
  • Public-sector bodies
  • State-funded primary and secondary schools

What you can get

  • Term loans or overdrafts of between £25,001 and £10 million per business
  • Invoice or asset finance of between £1,000 and £10 million per business
  • No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

How long is the loan for

The maximum length of the facility depends on the type of finance you apply for and will be:

  • Up to 3 years for overdrafts and invoice finance facilities
  • Up to 6 years for loans and asset finance facilities

Changes from 1 January 2022

At Autumn Budget 2021, the Chancellor announced that the Recovery Loan Scheme would be extended until 30 June 2022.

From 1 January 2022, the following changes will come into force:

  • The scheme will only be open to small and medium sized enterprises
  • The maximum amount of finance available will be £2 million per business
  • The guarantee coverage that the government will provide to lenders will be reduced to 70%These changes will apply to all offers made from 1 January 2022.

How to apply

Please get in touch and we will source the most competitive lender accredited to offer Recovery Loans for your business.

Speak with a Recovery Loan Finance Specialist today

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