Recovery Loan Scheme Launching 6th April 2021

04 March 2021

On 31st March 2021, the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) will come to an end.

On 3rd March 2021, the Government announced that these schemes will be replaced by a new Recovery Loan Scheme.

This Scheme is scheduled to launch on 6th April 2021 and run until 31st December 2021, subject to government review.

The aim of this new Recovery Loan Scheme is to help those businesses affected by the COVID19 pandemic by providing funding that can be used for any legitimate business purpose, including managing cashflow and investment and growth.

It is designed to appeal to businesses that can afford to take out additional debt finance for these purposes.

Features of the scheme, that we are aware of so far, will include:

  • Up to £10m facility per business: The maximum value of a facility provided under the scheme will be £10m per business. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

  • Turnover limit: There will be no turnover restriction for businesses accessing the scheme.

  • Wide range of products: Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities.

  • Term length: Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years.

  • Interest and fees to be paid by the business from the outset: Businesses will be required to meet the costs of interest payments and any fees associated with the facility.

  • Security and Personal Guarantees: As with the coronavirus business interruption loan scheme (CBILS), no personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

  • Access to multiple schemes: Businesses who have taken funding through either the coronavirus business interruption loan scheme (CBILS), coronavirus large business interruption loan scheme (CLBILS) or bounce back loan scheme (BBLS) will be able to access the new scheme, although the maximum they are allowed to borrow will depend on each individual lender’s assessment and scheme requirements.

  • Credit checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants. When making their assessment, lenders may overlook concerns over short-to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.

Eligibility

You will be able to apply for a loan if your business:

  • is trading in the UK

You will need to show that 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 to be confirmed

The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.

Please note that your business will be liable for 100% of the debt when taking out funding through the Recovery Loan Scheme. If the business is unable to repay, the scheme provides a partial guarantee to the lender, not to the business.

We will endeavour to keep the Recovery Loan Scheme details updated as further information is released.

Until the Recovery Loan Scheme launches, you have until the 31st March 2021 to apply for funding through the CBILS initiative or an alternative business loan through our panel of lenders.

If you want to see want options are currently open to you, then please do not hesitate to contact The Funding Store on 01908 880420 or request a call back at a more convenient time.

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This article has been produced by www.TheFundingStore.co.uk for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by HPG Holdings Ltd. In all cases appropriate professional legal and financial advice should be sought before making a decision.

This article has been produced by www.TheFundingStore.co.uk for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by HPG Holdings Ltd. In all cases appropriate professional legal and financial advice should be sought before making a decision.