Recovery Loan Scheme
When Rishi Sunak delivered his budget on the 3rd of March, many business owners held their breath in anticipation of what was to be announced. With the difficult challenges caused by the pandemic, and many business owners struggling to stay afloat, the government needed to offer some sort of lifeline to help businesses get back on their feet.
The Recovery Loan Scheme
One of the biggest announcements made by the chancellor in relation to business owners was the replacement of the Coronavirus Business Interruption Loan Scheme (CBILS) with the new Recovery Loan Scheme. This new scheme provides any business, regardless of size, to apply for a loan or overdraft between £25,000 and 10 million between now and the end of 2021. For anyone looking for alternative options, asset finance will also be available between £1000 and £10 million. A critical part of both schemes is that the government will guarantee 80 percent of the loan.
Finance terms will be up to a period of six years for term loans and asset finance, with overdrafts and invoice finance terms being set at three years. It is important to note that no personal guarantees will be taken on facilities loans up to £250,000, which essentially means that a homeowner will not be required to put his or her private residence up as security, This was identical to the previous scheme, so nothing has changed in that regard.
For anyone contemplating taking advantage of these schemes, the first applications can be made from the 6th of April, with the closing deadline being December 31st, although this is subject to review. The finance packages will be available via a range of different providers; if this is something you are interested in taking advantage of, AW Capital can guide you through the entire process from start to finish.
No Restrictions on What The Money Can Be Used For
Once a business has received the money, there is no restriction whatsoever on what the loan can be spent on, provided it is for a legitimate business purpose which would include growth or investment.
How Do I Know If I Am Eligible To Apply For The Recovery Loan Scheme?
The scheme has been designed with the intention of helping as many businesses as possible get through what will hopefully be the last part of the pandemic. However, while there are minimal restrictions regarding the type of businesses that can apply, there are some, which are listed below.
Your business must be based in the UK, and it must be a viable business or would have been feasible if it had not been for the pandemic. You must be able to show that the pandemic negatively impacted your business and that it is not currently in collective insolvency proceedings.
If you are interested in learning more about the Recovery Loan Scheme, contact the AW Capital team today on 0333 772 6165