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20 April 2021

Recovery Loan Scheme

 

The Government has introduced the Recovery Loan Scheme in April 2021 following the closure of applications for the Bounce Back Loan Scheme on 31 March 2021.

The Scheme is open to business’s trading in the UK. A business needs to show that it:

·       Would be viable were it not for the pandemic

·       Has been adversely impacted by the pandemic

·       Is not in collective insolvency proceedings (unless the business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply)

The loans may be used for any legitimate business purpose - including managing cashflow, investment and growth. The amounts available under the scheme are:

·       Term loans or overdrafts of between £25,001 and £10m per business

·       Invoice or asset finance of between £1,000 and £10m per business

No personal guarantees will be required up to £250,000 and a borrower’s principal residence cannot be taken as security.

The maximum length of the facility depends on the type of finance applied for:

·       Up to 3 years for overdrafts and invoice finance

·       Up to 6 years for loan and asset finance.

Businesses which have already borrowed from any of the coronavirus loan schemes namely:

·       The Bounce Back Loan Scheme

·       The Coronavirus Business Interruption Loan Scheme

·       The Coronavirus Large Business Interruption Loan Scheme

may still apply for the Recovery Loan Scheme but the amount borrowed under an existing scheme may limit the amount which it may borrow under the Recovery Lone Scheme.



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