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Extension to recovery loan scheme

Extension to recovery loan scheme

Robert Macdonald

The Recovery Loan Scheme (RLS) is currently open to businesses of any size to support them to access loans and other kinds of finance so they can recover after the pandemic and transition period, this replaced the former schemes of CBILS and BBLS.

As announced in the October Budget, the RLS has now been extended until 30 June 2022 with the following changes from 1 January 2022:
  • The scheme will only be open to small and medium sized enterprises
  • The maximum amount of finance available will be £2 million per business
  • The guarantee coverage that the government will provide to lenders will be reduced to 70%
The following eligibility and criteria will still apply:
  • Term loans or overdrafts of between £25,001 and £2 million per business (reduced from £10 million)
  • Invoice or asset finance provided in total of between £1,000 and £2 million per business (reduced from £10 million)
  • Personal Guarantees will not be sought for facilities up to £250k;
  • A borrower’s principal private residence cannot be taken as security.
  • The business must be viable or would otherwise be viable were it not for the impacts caused by Covid-19
  • The business must have been adversely impacted by the pandemic
  • The business must not be subject to insolvency proceedings
  • Banks, building societies, insurers, public-sector bodies and state funded schools are not eligible.
Business that received support under the earlier COVID-19 guaranteed loan schemes are still eligible to access finance under this scheme if they meet all other eligibility criteria. Individual lenders are likely to have additional eligibility criteria and applications will be subject to each lenders own assessment.

We recommend that you contact your existing lender to establish full eligibility criteria and details of the application process.

If you have concerns regarding your business cash flow or need assistance with the above, please contact us to explore your options.