In his budget last week Rishi Sunak announced a Recovery Loan Scheme to replace the current CBILS and BBLS which are due to end on the 31st March 2021. Businesses of any size can access loans and other kinds of finance up to £10 million per business. Once received, the finance can be used for any legitimate business purpose, including growth and investment. The recovery loan is separate to the Restart Grants (a grant scheme designed to help small businesses most badly effected by Covid-19 and is worth up to £18,000).
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses. Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance, terms will be up to three years. No personal guarantees will be taken on facilities up to £250,000 and, as before, a borrower’s principal private residence cannot be taken as security.
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 (to be announced).
To be eligible for the Recovery Loan Scheme your will need to show that your business is:
- 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
Business 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.
We will let you know as soon as more information is available including the list of accredited lenders.
It is worth mentioning that the Recovery Loan Scheme is less generous than the CBILS scheme. The CBILS scheme ends on the 31st March. Time is running out to apply for loans with nothing to pay for a year! If we can help you in any way give us a call on 01332 292022 or click here to e-mail.