Recovery Loan Scheme Extended Until June 2022
The program, which was originally developed to provide government-backed loans to businesses hardest hit by the Covid-19 pandemic, will also include new conditions for applications starting January 1, 2022.
The Recovery Loan Program originally provided government-backed loans from £ 25,000 up to a ceiling of £ 10 million with interest rates capped at 14.99%.
In his speech on the fall 2021 budget, the Federal Chancellor confirmed that this loan program will only guarantee a maximum of 2 million in advance as of January 1, 2022.
Furthermore, as of January 1, 2022, the program will only be open to small and medium-sized enterprises (SMEs).
British Business Bank recently announced that the Recovery Loan Program has reached a significant milestone since it was launched in April. 76 lenders accredited to provide home renovation loans had made more than £ 1 billion to small businesses across the country to support their sustained recovery.
Lisa Jacobs, Managing Director of Funding Circle UK, an accredited recovery loan provider, said: “Finance is key to realizing these growth plans and we look forward to continuing to support businesses through the program, job creation, and economic growth drive recovery. "
What Can You Borrow Under the Recovery Loan Scheme from January 2022?
Term or overdrafts worth between £ 25,001 and £ 2 million can be applied per company. In addition, SMEs can apply for asset finance or invoices between £ 1,000 and £ 2m per company.
Overdraft and bill of exchange financing facilities are provided for a maximum of three years. In the meantime, credit and asset finance facilities will be available for up to six years.
Eligibility for the Recovery Loan Scheme
To prove your eligibility for the Settlement Loan Program, your small business must continue to operate in the UK. You must also be able to demonstrate the negative financial impact of the Covid-19 crisis on your business and demonstrate pre-pandemic viability.
Your business must also be free from group bankruptcy proceedings, although different eligibility rules may apply to small businesses within the scope of the Northern Ireland Protocol.
Small businesses wishing to apply for a repossession loan can find the list of accredited lenders on the British Business Bank website. Using the filters, you can quickly find lenders in your area who can offer the type of financing you want.
Catherine Lewis La Torre, Chief Executive Officer of British Business Bank, said: “Businesses across the country are beginning to look beyond the pandemic to see what opportunities are available to recover.
"The British Business Bank is committed to helping smaller businesses access the finance they need to grow sustainably in the future."
Who Can Apply for a Recovery Loan Scheme?
The admissions rules for the RLS are very similar to those for the CBIL program. To apply, your client must be a UK company but not a limited company.
The program is open to:
● Single owner
● Limited partnerships
● Limited liability companies
● Cooperatives and non-profit associations and
● any other legal person doing business in the UK and doing business through a business account.
In addition, the client must be able to demonstrate that his company:
● would be feasible if it weren't for the pandemic
● was adversely affected by the pandemic