What is the Business Recovery Loan?
In the March Budget, Chancellor Rishi Sunak stated:
“As the Bounce Back Loan and Coronavirus Business Interruption Scheme (CBILS) come to an end, we are introducing a new Business Recovery Loan Scheme to take their place.”
Under the new scheme, businesses of any size can apply from £25,000 to £10m through to the end of 2021, with the government providing a guarantee to lenders of 80%.
The new recovery loan scheme being launched will help those businesses who have either not borrowed enough cash under the existing CBILS arrangements or where they depleted their cash reserves over the last 12 months.
How much can I Borrow?
10 million is available per business. The actual amount that will be offered and the terms are however, at the discretion of participating lenders, they may offer:
- Term loans or overdrafts of between £25,001 and £10 million per business.
- Invoice or asset finance of between £1,000 and £10 million per business.
The government guarantees 80% of the finance to the lender, however, as the borrower, you are always 100% liable for the debt.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence (home) cannot be taken as security.
How Long is the Loan for?
The maximum length of the facility depends on the type of finance you apply for and will be:
- Up to 3 years for overdrafts and invoice finance facilities.
- Up to 6 years for loans and asset finance facilities.
You can apply for a loan if your business:
- Is trading in the UK.
You need to show that your business:
- Would be viable were it not for the pandemic.
- Has been adversely impacted by the pandemic.
- Is not in collective insolvency proceedings (unless your business Is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply).
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.
Who Cannot Apply?
Businesses from any sector can apply, except:
- Banks, building societies, insurers and reinsurers (but not insurance brokers).
- Public-sector bodies.
- State-funded primary and secondary schools.
How to Apply?
Find a lender accredited to offer Recovery Loans from the list on the British Business Bank website: Find a lender
More information for businesses about the scheme is also available on the British Business Bank site.
The scheme is open until 31 December 2021, subject to review.
Help & Advice
The pandemic has given many businesses the need and the drive to diversify and adapt to the ongoing situation. The Business Recovery Grant is the latest in a range of support offered by the government to keep UK businesses afloat while restrictions have stopped or impeded their capability to trade.
For more information regarding some of the other support schemes for businesses or individuals, you may find useful guides on our resources page.
If you would like to make the most of The Business Recovery Grant, but need advice based on your specific circumstances and financial position, get in touch with a member of our team to discuss the options.
Give us a call on 01452 812 491, or send an email to firstname.lastname@example.org