Recovery Loan Scheme Open (CBBILS & BBLS replacement)
The Recovery Loan Scheme has been designed by the government to allow businesses to continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close. The aim being to provide support as businesses recover and grow following the disruption of the pandemic and the end of the transition period.
Once received, the funds can be used for any legitimate business purpose, including growth and investment. The government will guarantee 80% of the loan in order to make sure that businesses can access funds that might otherwise not be available under normal lending criteria.
When does the recovery loan scheme open?
The scheme launches on 6 April and is open until 31 December, subject to review. 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 and 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.
Who cannot apply
Businesses from any sector will be eligible to apply, except:
- banks, building societies, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
How to apply
The scheme launches on 6 April 2021, click below to visit the application site
If you have questions regarding the recovery loan scheme or eligibility, please get in touch with your Swindells’ partner who will be able to advise you further.
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