The new loan scheme to support UK business as they recover from the disruption of the pandemic was announced at the Budget.
The scheme launches on 6 April and is open until 31 December, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.
Already major banks like Barclays, Lloyds and Virgin Money have signed up to the new scheme.
The Recovery Loan Scheme allows businesses of any size to access loans and finance up to £10 million per business. Providing support as businesses recover, following the disruption of the pandemic and the Brexit transition period.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government guarantees 80% of the finance to ensure the lenders continue to have the confidence to lend to businesses.
The current Bounce Back Loans and Business Interruption Loans will close for new applications at the end of March. These replacement facilities will be welcomed by businesses forced to close or reduce activity during the pandemic.
Types of finance available
Loans and overdrafts will be available between £25,001 and £10 million per business.
Invoice finance and asset finance will be available between £1,000 and £10 million per business.
Finance terms are up to six years for term loans and asset finance facilities. Overdrafts and invoice finance facilities will have terms up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
Who will be eligible?
You will be able to apply for a loan if your business is trading in the UK and that your business is viable or would be viable were it not for the pandemic.
Businesses must not be in collective insolvency proceedings.
Businesses that received support under the existing Covid-19 guaranteed loan schemes will still be eligible to access finance under this scheme if they meet all other eligibility criteria.