New Recovery Loan Scheme [6 April 2021 Launch Date]

With the budget announcement in early March, a new Recovery Loan Scheme will be launching in the UK on 6th April. With this also confirms the end of the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS) on the 31st March 2021.

Although full details have not yet been announced by the British Business Bank, we do know some of the key features. The main headline is that banks and approved lenders will get a 80% government backed guarantee on any loans made under the scheme. This is to help the continued availability of funding for SME’s as the Uk recovers from the Covid Pandemic.

However businesses taking loans under the scheme will still be fully 100% liable for any debt that they take on and it may include personal guarantees. Also there is no fees or interest covered by the government, like there was in the BBLS and CBILS.

So this means that finance under the scheme will be much closer to normal “business as usual” lending, similar to pre-covid. The main benefit to businesses would appear to be greater access to funding from banks and lenders, due to the partial guarantee the government is providing.

We will release more information as its announced. Please get in touch if you want to discuss your business finance options.

Key Features of The Recovery Loan Scheme

Here are the key points of the recovery loan scheme that have so far been announced.

  • Government Backed Guarantee To Scheme Lenders For 80%
  • Maximum £10m of Facilities Under The Scheme Per Business
  • Minimum facility size of £1,000 for Asset Finance and Invoice Finance
  • Minimum facility size of £25,001 for Business Loans and Overdrafts
  • Up to 6 Years maximum term length for loans and asset finance
  • Up to 3 years maximum term length for overdrafts and invoice finance
  • All interest and fees will be paid as normal by the business
  • Businesses who have taken out a CBILS or Bounce Back Loan can still access the scheme (lender criteria and underwriting permitting)
  • Flexibility for lenders when assessing short-to-medium term financial performance caused by Covid

Full details of the announcement can be found here “Budget 2021: British Business Bank Response”