What is the government backed Recovery Loan Scheme?
The Scheme is a government backed initiative set up to help UK businesses of any size access Business Loans and other kinds of finance so they can recover after the pandemic.
The new scheme replaces previous schemes such as CBILS and the Bounce Back Loan Schemes that ended on the 31st March. There are a range of finance products available including Business loans, Asset Finance, Invoice Finance and even Overdrafts. The level of funding provided to each business depends on its particular circumstances; the maximum amount available to any given business is capped at £10M.
Who can Apply?
You can apply for funding via the Recovery Loan Scheme if your business trades in the UK and has been impacted by the pandemic. If your business has already borrowed from any of the other coronavirus loan schemes – namely: the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), RLS is still open to you.
What you can get?
If you cannot pay back the Bounce Back Loan, your company has likely reached a state of insolvency, one of the definitions of which is an inability to pay bills when due.
The state of insolvency puts directors at risk unless you understand what it means and how it changes your responsibilities. This means you cannot pay anyone (employees, yourself, any creditor etc) without risk of showing preference.
1. Loans or Overdrafts of between £25,001 and £10M per business.
2. Invoice or Asset Finance of between £1,000 and £10M per business.
How long is the loan For?
The maximum length of the facility depends on the type of finance you apply for and will be:
1. Up to 6 years for Loans and Asset Finance facilities.
2. Up to 3 years for Overdrafts and Invoice Finance facilities.
How to apply?
The scheme can be accessed via a panel of approved and accredited lenders in conjunction with the British Business Bank. The scheme is open until 31 December 2021, subject to review.