The Recovery Loan Scheme now open for applications

Posted on 14th April 2021 by Streets


Image to represent The Recovery Loan Scheme now open for applications

The Recovery Loan Scheme aims to help businesses of any size access loans and other forms of finance, so that they can recover after the pandemic and transition period.


The scheme is available to those that may have already used existing loan schemes such as the Bounce Back Loans or other coronavirus interruption loan schemes. The amount, though borrowed under an existing scheme, may in certain circumstances limit the amount that can be borrowed under the new Recovery Loan Scheme.

Those looking to access funding through the scheme must have been affected by Covid-19, though the finance can be used for any legitimate business purpose – including cashflow, investment and growth.

Up to £10 million is available per business. The actual amount offered and the terms are at the discretion of participating lenders.

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.

The scheme is open until 31 December 2021, subject to review.

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.

Accredited lenders include Bank of Scotland, Barclays, HSBC, NatWest, Lloyds Bank, Paragon, RBS, Santander, Skipton Business Finance, Yorkshire Bank and Clydesdale Bank.

Eligibility

You can apply for a loan if your business:

  • is trading in the UK

You need to show that your business:

  • would be viable were it not for the pandemic
  • has been adversely impacted by the pandemic
  • is not in collective insolvency proceedings

Who cannot apply?

Businesses from any sector can apply, except:

  • banks, building societies, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

What you can get

  • term loans or overdrafts of between £25,001 and £10 million per business
  • invoice or asset finance of between £1,000 and £10 million per business

No personal guarantees will be taken on facilities up to £250,000 and a borrower’s principal private residence cannot be taken as security.

How long the loan is for

The maximum length of the facility depends on the type of finance you apply for and will be:

  • up to 3 years for overdrafts and invoice finance facilities
  • up to 6 years for loans and asset finance facilities

How to apply

Those seeking finance through the scheme will need to approach an accredited lender and will need to provide certain evidence to demonstrate the affordability of the loan and their ability to repay.  This is likely to include the following:

  • Management accounts
  • Business Plan
  • Historic accounts
  • Details of assets

Looking for support and guidance with an application

If you are looking for support and assistance in making an application or preparing the relevant information for submission, then please email or call your usual Streets contact.


No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.


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