What is the Recovery Loan Scheme and Are You Eligible?

Modern accountants for business growth in London
Is your business in need of financial help to recover from the economic impact of the COVID-19 pandemic? The Recovery Loan Scheme is a new government funded loan scheme which provides support to businesses and jobs in the UK that need protection.

Share This Post

About the Scheme

The Recovery Loan Scheme is aimed at helping businesses of all sizes to access financial help in a bid to recover from the pandemic, and it will ensure that businesses will continue to benefit from government guaranteed finance until the end of the year.

To date, the UK government has already provided £75 billion worth of loans to support over 1.6 UK businesses. The Recovery Loan Scheme is part of the government’s £350 billion aid package to support millions of workers across the nation, and the Recovery Loan Scheme will run until 31 December 2021.

 

What Is Included?

The loans include 80% government guarantee to the lender and an interest rate capped at 14.99%; borrowers are 100% liable for the debt. Within the Recovery Loan Scheme, businesses can get:

  • Term loans, or overdrafts, of between £25,001 and £10 million per business
  • Invoice or asset finance of between £1,000 and £10 million per business

As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.

Who Can Apply?

You are eligible for the Recovery Loan Scheme if your business is trading in the UK, and you must be able to show that:

  • Your business has been impacted by the COVID-19 pandemic
  • Your business would otherwise be viable if not for the pandemic
  • Your business is not proceedings for collective insolvency

Who Cannot Apply?

Businesses within any sector are eligible to apply for the scheme, unless they are:

  • Banks or building societies
  • Insurers and reinsurers
  • Public-sector bodies
  • State-funded primary and secondary schools

How Long Is the Loan For?

Depending on the type of finance you are applying for, the maximum length of the facility will be as follows:

  • For overdrafts and invoice finance: up to 3 years
  • For loans and asset finance: up to 6 years.

How Can You Apply?

If your business meets all of the criteria mentioned in this blog, you are eligible to apply for the Recovery Loan Scheme. The next step you need to take is to find a lender accredited to offer the Recovery Loans – a list of permitted lenders is available on the British Business Bank website.

After deciding on a lender, you must approach them yourself. The amount of finance provided to you varies between lenders so it’s important to check the lenders’ websites for information on the amount of finance they are able to offer before you make a decision.

What Will a Lender Need From You?​

You are required to provide evidence when you apply for the Recovery Loan Scheme to confirm that you have the means to repay the loan. This evidence can include your:

  • Business plan
  • Management accounts
  • Historic accounts
  • Details of assets.

 

Contact TaxCare today to get advice.

 

More To Explore

benefits of filing tax return early
Income Tax

9 Benefits of Filing Tax Returns Early

This extensive article tries to emphasise the benefits of submitting your taxes early, including how it can save you money and prevent needless worry

Why is My Self-Assessment Tax So High
Income Tax

Why is My Self-Assessment Tax So High?

Find the reasons why self-assessment tax is so high. Learn common factors influencing tax amounts and practical tips to manage your tax liabilities effectively.

Leave a Reply

Your email address will not be published. Required fields are marked *

Do You Want to Boost Your Business?

Get in Touch Now

Tax Care Help Chat
Send via WhatsApp

It takes Less than 30 Seconds !

Looking for a professional accounting service? TaxCare Accountants offers a simple, affordable accounting service with a fixed fee.

Get Instant Quote

This field is for validation purposes and should be left unchanged.