The government’s new Recovery Loan Scheme is now open for UK businesses to apply for financial support if they’ve been affected by the coronavirus pandemic.
Launched on 6 April 2021, the £75 billion programme is the latest government-backed loan scheme to provide much-needed finance for small businesses.
The Recovery Loan Scheme (RLS) is to replace other Covid loans that we’ve seen over the past 12 months, including the government Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS), which both ended on 31 March.
With the RLS, businesses can apply for a loan of between £25,000 and £10 million. Any loans are 80 per cent backed by the government, giving a guarantee to lenders if businesses are unable to pay back their debt.
There’s also a cap on interest rates at 14.99%, although the government expects this to be much lower in the ‘vast majority of cases’. Just note that you’ll need to pay any interest yourself straight away, as well as any fees (unlike with the Bounce Back Loan Scheme).
The RLS is set to run until 31 December 2021 and hopes to help businesses raise the finance they need to recover from the pandemic as restrictions lift across the country.
You can apply to the scheme if Covid-19 has affected your business, or if you’ve used one of the other loan schemes before, like the BBLS or CBILS.
To be eligible, you must be trading in the UK and have a viable business (were it not for the pandemic).
The loan can be used to support your business with, for example:
For more information on how to apply and to choose an accredited lender, visit the British Business Bank website.
The launch of this new scheme comes as England prepares to reopen outdoor hospitality, non-essential shops, hairdressers, and gyms on 12 April.
The Chancellor, Rishi Sunak, says: “As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.”
If you’re starting up your business again soon, read our guide to reopening for a checklist and helpful tips.
This financial support is in addition to the Restart Grants announced in the Budget last month. The 'restart grants' are administered by local authorities and offer businesses a one-off cash grant of up to £18,000.
David Postings, Chief Executive of UK Finance, said: “The banking and finance industry remains committed to supporting businesses of all sizes through the next phase of the pandemic response. As focus turns to economic recovery, we know that many firms are still facing uncertainty. The new Recovery Loan Scheme, alongside other commercial financial support, will help firms rebuild and invest for future growth.”
Will your business take advantage of the new loans scheme? Let us know in the comments.
Looking for the latest news and features to help you stay ahead? Sign up for our monthly newsletter and get the inside track on the issues that matter to you.Sign up now
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
22 June 2020 • 9-minute read
How to start a clothing business. It can be an all-consuming process but with that first sample run and customer sale comes great…
6th Floor99 Gresham StreetLondonEC2V 7NG
Sol House29 St Katherine's StreetNorthamptonNN1 2QZ
© Copyright 2021 Simply Business. All Rights Reserved. Simply Business is a trading name of Xbridge Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Registration No: 313348). Xbridge Limited (No: 3967717) has its registered office at 6th Floor, 99 Gresham Street, London, EC2V 7NG.