We have previously talked about the Recovery Loan Scheme in a previous blog, and following the Autumn Budget a few changes to the Recovery Loan Scheme were announced.
Initially the scheme was due to end on 31st December 2021 but the governement announced an extension to the scheme of up to six months giving the new end date for the scheme 30th June 2022.
Along with the extension a few additional changes were also announced.
- The scheme will only be open to small and medium sized enterprises (turnover <£45m)
- The maximum amount of finance available will be £2 million per business (maximum amount per Group limited to £6m)
- The guarantee coverage that the government will provide to lenders will be reduced to 70%
These changes will apply to all offers made from 1 January 2022.
As we approach the end of the initial phase lenders will also be looking at their application pipeline as each lender takes a different amount of time to process applications so it may not be the case that applications made before 31 December will be subject to the current terms. Applicants should check with their preferred lender
Here are some of the features of the Recovery Loan scheme that remain the same.
For term loans and asset finance facilities: from three months up to six years.
For overdrafts and invoice finance facilities: from three months up to three years.
Interest and fees
These are to be paid by the business from the outset – There is no period of deferred payment or interest being paid for the borrower. This is one of the key changes from the prior schemes – Businesses are required to meet the costs of interest payments and any fees associated.
To find out the latest list of lenders click here
If you would like help applying with the scheme complete our online form