Recovery Loan Scheme - What is it?

The Recovery Loan Scheme will launch on 6 April 2021, following the closure of the current Covid-19 debt schemes on 31 March 2021. It will run until 31 December 2021, but this is subject to review.

The money can be used for any legitimate business purpose including managing cashflow, growth and investment. The government will guarantee 80% of the value of the loan, to the lender. This will ensure access to funding for businesses that might not meet the criteria for other lending.

Details of the scheme include:

Up to £10m facility per business: The maximum value of a facility provided under the scheme will be £10m per business. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
There are a wide range of products: term loans, overdrafts, asset finance and invoice finance facilities.

Turnover limit: There will be no turnover restriction.

Businesses that were supported under the previous Covid-19 guaranteed loan schemes will still be eligible for this scheme. Certain types of organisation are not eligible (see the government's  Recovery Loans Scheme guidance for details).

Term length: Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years.
Interest and fees to be paid by the business from the outset.

To apply for a loan you must be a business trading in the UK and to be eligible your business must have been viable were it not for the pandemic, you must have been impacted by the pandemic and not subject to insolvency proceedings.

The scheme will launch on 6 April 2021. Further details on how to apply and details of accredited lenders will be released in due course.

Approach may differ from lender to lender.

For further details please speak with your Partner or Client Manager.