A new Recovery Loan Scheme will be launched from April 6, 2021.
The new scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses.
The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close, providing support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
The scheme launches April 6 and is open until December 31, subject to review.
Loans will be available through a network of accredited lenders,
Loans will be available through a network of accredited lenders, whose names will be made public in due course.
What type of finance is available?
- Term loans and overdrafts will be available between £25,001 and £10 million per business.
- Invoice finance and asset finance will be available 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 taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
You will be able to apply for a loan if your business:
- is trading in the UK
You will need to show that your business:
- 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 - further details will be provided in due course
Businesses that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme if they meet all other eligibility criteria.
How to apply
The scheme will launch on April 6, 2021.
Further details on how to apply and details of accredited lenders will be released shortly.
Ellis & Co Chartered Accountants and Business Advisers, Chester & Wrexham - 01244 343504, firstname.lastname@example.org