17 March 2021
The Recovery Loan Scheme assumes an opportunity for business to apply for affordable finance to support cashflow, investment and growth.
From 06 April 2021 the Recovery Loan Scheme will replace the existing business support schemes: 1) the Bounce Back Loan Scheme (BBLS); 2) the Coronavirus Business Interruption Loan Scheme (CBILS), 3) the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Financial terms
The amount of support is between £1,000 and up to £10 million in finance, depending on the type of facility. For example, term loans and overdrafts will be available between £25,001 and £10 million per business, invoice finance and asset finance will be available from £1,000.
Interest and fees will be different, however they will be more attractive than a standard finance conditions.
The terms will be also different. For example, overdrafts and invoice finance are available for up to 3 years; loans or assets finance facility awarded can have a maximum term length of 6 years.
Who is eligible for the support measure?
Under the Recovery Loan Scheme businesses of any size and legal shape may apply for support. There is no turnover limit.
Business will need to show that this business:
1) is viable or would be viable were it not for the pandemic;
2) has been impacted by the coronavirus pandemic;
3) is not in collective insolvency proceedings - further details will be provided in due course.
You can still take out a loan under this business support scheme even if you have successfully applied for a BBLS, CBILS, or CLBILS facility.
How to apply?
The scheme will be launch on 06 April 2021 and run until 31 December 2021. Further details on how to apply and details of accredited lenders will be released.
Summary
Therefore, with new Recovery Loan Scheme the government continues to support business in connection with the problems caused by the pandemic COVID-19. Such Loan Scheme can be used to support cashflow, investment and growth.
For further information on any of the points above contact
Mikita Makayou at mikita@lexefiscal.com, or
Dr. Frank at clifford.frank@lexefiscal.com.
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