Budget 2021: what you need to know about the Recovery Loan Scheme
The Recovery Loan Scheme will help businesses restart and recover from the Covid-19 pandemic, the Government has announced.
But what is the Recovery Loan Scheme and how does it work? In this blog, we’re answering the questions you need to know.
What is the Recovery Loan Scheme?
Launching on 06 April 2021, the Recovery Loan Scheme will replace the existing finance support schemes – the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS).
Under the initiative, businesses can apply for affordable finance to support cashflow, investment and growth.
How much can I get?
Businesses can apply for between £1,000 and up to £10 million in finance, depending on the type of facility. For example, asset and invoice finance starts at £1,000, while term loans and overdrafts start at £25,001.
What are the fees, interest, and term length?
Fees and interest will vary from loan to loan, but are likely to be more attractive than a standard finance agreement.
Any loan or asset finance facility awarded through the scheme can have a maximum term length of six years, while overdrafts and invoice finance are available for up to three years.
Who can apply?
Unlike previous schemes, there is no turnover limit. Businesses of any size and shape can apply for finance under the Recovery Loan Scheme.
While lenders will be required to undertake credit and fraud checks for all applicants, they “may overlook concerns over short-to-medium term performance owing to the pandemic”.
When can I apply?
The scheme will open on 06 April 2021 and run until 31 December 2021 (subject to review).
I’ve already applied to a Covid-19 finance scheme. Am I eligible for the Recovery Loan Scheme?
Yes, you can still take out a loan under the Recovery Loan Scheme even if you have successfully applied for a CBILS, CLBILS, or BBLS facility.
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