In a press release by the British Business Bank on 6th March 2024, it was announced that the Recovery Loan Scheme (RLS) is to be replaced by the ‘Growth Guarantee Scheme’.
According to the announcement1, the change will take place from the 1st July 2024 and will remain in place until 31 March 2026.
The End of the Recovery Loan Scheme
Many with the commercial finance industry consider the RLS scheme to be a success. It was originally set up to support businesses with lending through Covid and has been extended twice, with current iteration being the third.
£4.3 billion was lent to SME’s in the first two versions of the scheme
Source: British Business Bank
The current version of RLS does not include the same benefits as the previous two versions such as interest payments covered and no personal guarantees. However, over £1 billion has still been lent under the current version of the scheme.
Find out more about the Recovery Loan Scheme.
The Growth Guarantee Scheme Details
Although only very limited details have been released about the new Growth Guarantee Scheme, its expected to remain largely the same as the current version of RLS.
The current scheme includes:
- Guarantee is to the lender – 70% of balance
- Maximum of £2 million Per Business Group
- Minimum of £1,000 for Asset or Invoice finance
- Minimum of £25,001 for Term Loans or Overdrafts
- Start on 1st July 2024 and end 31st March 2026
The main benefit to SME’s is that the lender guarantee provided by the government should allow more finance facilities to be approved.
Find out more about how you can apply for a business loan today.