At the Budget on 3 March 2021, the Government announced that the Recovery Loan Scheme, a new debt finance programme will launch on 6 April 2021.
The new scheme will replace the government Bounce Back and CBILS loan schemes. Businesses can use the new loan scheme for any business purposes such as managing cashflow, investment or growth.
The scheme ensures that businesses of any size can continue to access loans of up to £10 million to support growth and recovery. The government guarantees 80% of the finance to the lender to ensure that they continue to have confidence to lend to businesses.
Features of the scheme include:
- £10m maximum value facility: Minimum values range from £1,000 for asset and invoice finance and £25,000 for term loans and overdrafts
- The scheme is aimed at businesses who can afford to take out additional debt finance for growth purposes
- The scheme will include a wide range of products such as term loans, overdrafts, asset finance and invoice finance
- There will be no turnover limit for businesses wishing to access the scheme
- Term loans and asset finance facilities will be available for up to 6 years, and overdrafts and invoice finance available for up to 3 years.
- Interest rates will be paid by the businesses from the get-go.
- There will be access to multiple schemes. Businesses who have taken out CBILS, CLBILS or BBLS facility will be able to access the new scheme,
- Lenders will be required to undertake credit and fraud checks
- Banks, building societies, insurers, public-sector bodies or state-funded primary or secondary schools.
Find out more here https://www.gov.uk/guidance/recovery-loan-scheme.
Loans will be accepted through a network of accredited lenders.
Get in contact with a Funding Bay expert to find out more about the Recovery Loan Scheme here.