Recovery Loan Scheme: Extended & Renamed
During the Spring 2024 Budget, one of the topics was the Recovery Loan Scheme’s extension and renaming.
The Recovery Loan is one of the Government’s schemes that was introduced to support UK businesses recover from the effects of the Coronavirus Pandemic. The Recovery Loan was due to end at the end of June 2024 however, Jeremy Hunt has pledged £200 million of funding to extend it until March 2026.
As well as the extension of the scheme, from the 1st of July it will be renamed to the Growth Guarantee Scheme. It’s expected to support 11,000 SMEs across the UK access the finance they need. The terms of the scheme will remain unchanged.
Key Features of the Loan:
- Minimum finance facilities: £1,000 for asset and invoice finance and £25,001 for terms loans and overdrafts.
- Maximum finance facility of £2 million.
- Repayment terms up to 6 years for term loans and asset finance and up to 3 years for overdrafts and invoice finance.
- When lenders are making their assessment, lenders may overlook concerns over short to medium-term business performance due to the pandemic.
- If you wish to settle your Recovery Loan in full, some lenders have no fees and you’ll only pay interest on the time you borrowed.
My business has a CBILs or Bounce Back Loan – what are my options?
If you took out a Coronavirus Business Interruption Loan Scheme (CBILS), Bounce Back Loan (BBL) or Recovery Loan (RLS) before the 30th of June 2022, you can still apply for the new iteration of the Recovery Loan Scheme. Additionally, there is no requirement to refinance any existing Government debt.
Refinancing your CBILs, BBL, RLS or any other finance facility that you have can be an opportunity to reduce the amount of interest you’re paying overall by securing a new lower rate and you could reduce your lower monthly repayments. If your business has multiple finance facilities, consolidating debt into one finance facility could reduce your overall costs paired with one payment or easier cashflow management.
Also you could have varying interest rates, some of which may be higher than others, or incur fees for things like credit cards and overdrafts.
You can save money on interest and other fees by consolidating all of your debts. You might also be eligible for a reduced rate if your company’s revenue has increased or its financial standing has improved.
Is the Recovery Loan Scheme the best finance facility for my business?
The honest answer to this is that we don’t know. Without looking at your business’ finances, an accurate assessment can’t be made. As a broker, we have a thorough understanding of all the finance products available alongside excellent working relationships with our lenders. You may think a Recovery Loan could be the finance facility that’s best suited but an Asset Finance Facility may be better suited to your business’ needs with more competitive rates and lower monthly repayments.
No-obligation Free Review – Get in touch with our team!
Whether you’re looking into a Recovery Loan or want to find out what your finance options are to grow your business, purchase new commercial vehicles and equipment or pay an unexpected bill, get in touch with our highly experienced team for a no-obligation discussion. We take the time to understand your business and plans and provide no-obligation quotes.
Get in touch with our team to discuss your requirements. Call us on 01270 443510 or complete our enquiry form and we’ll be in touch as soon as possible.
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