The Recovery Loan Scheme has been extended – are you eligible?
With most of the Government’s Covid financial support schemes now closed, the Recovery Loan Scheme (RLS) has been a last route to funding for many Cobid-impacted businesses. The RLS was scheduled to end on 31 December, putting a very final full stop on government-backed financial assistance for the business community. But in the Autumn Budget & Spending Review 2021, the Chancellor, Rishi Sunak, announced an extension of six months to the scheme, making it possible to apply for a recovery loan until 30 June 2022. So, is your business eligible for this funding? And, how much could you borrow to fund the next stage of your recovery in 2022? Who is eligible for the Recovery Loan Scheme? The Recovery Loan Scheme (RLS) is aimed primarily at businesses which are viable in the market, but that are struggling to recover and grow due to Covid-19. Funding of up to £10million is available to eligible businesses that can meet the conditions for making an RLS claim. Your business must:
A chance to boost your working capital If you meet the RLS criteria, this is an excellent opportunity to borrow money on very attractive terms and to bring additional working capital back into the business. Facilities are available as asset finance, invoice finance, overdrafts or term loans.
A decrease in the government-backed loan guarantee Currently, the Government is offering a guarantee against 80% of any losses on recovery loans that are taken out via accredited lenders. This has encouraged lenders to offer loans where the decision was marginal without the guarantee, while keeping them open to a small amount of risk. Unfortunately, an additional change to the scheme was also announced in the Autumn Budget, with the level of that government-backed guarantee dropping down from 80% to 70%. This 10% drop down to a 70% guarantee will take place for loans advanced from 1 January 2022. Talk to us about applying for a recovery loan Lenders will want to see some form of business plan or projection before approving any facilities. We’re ideally placed to help you prepare financial projections and to provide the accounts, cashflow forecasts and background information that a lender will want to see. Come and talk to us about the Recovery Loan Scheme and your financing requirements in general. We’ll support your applications and will help you to manage your funding needs. Get in touch to discuss the Recovery Loan Scheme. |