Recovery Loan Scheme
The Recovery Loan Scheme Extended for 2 Years
The Recovery Loan Scheme was due to end on the 30th of June 2022 however, the Government announced on the 20th of July that they have extended the scheme for a further two years.
The extension will be providing further Government support for businesses who are faced with cost pressures and adds to measures already announced by the Chancellor such as 50% business rates relief for eligible high street businesses.
The main change to the Recovery Loan Scheme is that lenders may require a personal guarantee from the borrower whereas before no personal guarantees were required. The Government will underwrite 70% of the lender liabilities and the maximum loan size remains at up to £2million.
Recovery Loan Criteria
Eligibility for the Recovery Loan:
- To be a business trading in the UK with a turnover no greater than £45million
- To show that you’re a viable business (some lenders may disregard any concerns over short to medium term business performance due to the impact of COVID-19)
- Proof that your business is not in collective insolvency proceeding
What has changed?
- There is no requirement for businesses to confirm and prove that they have been affected by COVID-19 (charities and further education colleges will still need to meet this requirement)
Who couldn’t apply for the Recovery Loan?
- Banks, building societies, insurers and reinsurers (not insurance brokers)
- Public sector bodies
- State funded primary and secondary schools
A lender can provide up to £2million in the following finance solutions:
- Term loans
- Invoice Finance
- Asset Finance