Recovery Loan Scheme 2021 Full Update – Where Do I Apply for My Loan?
The government launched its long awaited renovation loan program today (April 6).
The Recovery Loan Program (RLS) announced in last month’s budget has replaced the Bounce-Back Loan Program (BBLS) and the Coronavirus Business Interruption Loan Program (CBILS).
The aim of the program is to provide businesses of all sizes with access to credit and other finance to help them recover from the pandemic and move forward. It can be used for improvements such as managing cash flow, growth, and investments.
Up to £ 10m per company is available. The minimum funding requirement is £ 1,000 for asset and bills funding and £ 25,001 for term loans and overdrafts. The total amount offered is at the discretion of the participating lender. They do credit and fraud checks before granting you funding.
> See also: What is invoice financing?
The government guarantees the lender 80 percent of the funding, and the borrower is always 100 percent liable for the debt. The annual interest rate as well as the upfront and other fees may not be more than 14.99 percent.
In contrast to BBLS and CBILS, the RLS is awarded at standard conditions for commercial banks. Kreston Reeves says companies have to pay arrangement fees and repay loans with interest right from the start.
John Walsham, business development and finance advisor at Kreston Reeves explains:
“Questions have been raised about whether directors are required to provide personal guarantees and, although the guidelines were released late in the day, it has now been confirmed that they are not required for loans under £ 250,000.
“Lenders are expected to charge a premium at their usual interest rates, bearing in mind that in many cases they will rely solely on the government guarantee as collateral.
“However, companies should note that the 80 percent government guarantee does not mean that they will escape liability for the loan. If a company defaults and a lender is unable to get back the money they borrowed, they can turn to the government to reimburse the lender for up to 80 percent of the loan value. “
The system is open until December 31st, subject to review.
Who Are the Accredited Lenders of the Recovery Loan Scheme?
The British Business Bank (BBB) has listed the accredited lenders listed below.
Revolving Loans (Overdrafts)
How do I apply?
You can apply directly through your lender. Check the links above for more details.
How long is the term?
The length depends on what type of funding you are applying for.
- Up to three years for overdrafts and bill finance facilities
- Up to six years for loans and asset finance facilities
Where do you get your small business from? Restart Grant worth up to £ 18,000