The Government’s recovery loan scheme was due to expire at the end of 2021. A six-month extension was announced in the Autumn Budget and it is now open for applications until 30 June 2022. 

But with lingering uncertainty in the UK economy, now’s the time to apply for this Government initiative to help businesses of all sizes. Don’t miss the chance to give your business a cashflow boost.

Here’s how the recovery loan scheme works and how it could help your business. 

What is the recovery loan scheme?

The recovery loan scheme is a Government-backed scheme to help UK businesses get access to finance quickly, if they’ve been adversely affected by the COVID-19 pandemic.

The Government guarantees 80% of the finance to the lender. This means lenders have greater confidence in approving the loans to businesses, and may relax stringent application processes. For the borrower, this means you’ll be able to access the cash you need more quickly. 

Loans are available through accredited lenders listed on the British Business Bank website. There are 75 accredited lenders at the time of writing.

You can borrow between £25,001 and £10 million for your business, in the form of term loans or an overdraft. Or you can apply for invoice finance or asset finance to the value of £1,000 to £10m.

How could it work for your business?

The scheme does what it says on the tin. It will help you recover from the adverse impact of the pandemic. If you need a cash injection, and you need it quickly, the scheme could be the support you’ve been looking for.

The right support for you depends on the specific needs of your business. If you need to boost your cashflow and your profits haven’t yet recovered, you might want an interest-only loan. That will give you time to rebuild your cash reserves before you need to repay the capital on the loan.

Perhaps you need cash to tide you over while you wait for your suppliers to pay your invoices. In that case, an invoice finance facility which releases up to 90% of your invoices straight away might be the right product for you. 

Products under the recovery loan scheme are relatively short-term, with the maximum length of an overdraft or invoice finance facility being three years. While the maximum length of a loan or asset finance facility is six years. The scheme is designed to buoy up your business while cashflow remains challenging in the short-term. 

Whichever financial support you might need, you’ll still be 100% liable for the debt. The Government’s backing will only be realised in the event that your business goes into insolvency. 

You have to continue to make repayments on your loan, or pay the charges on your facility. But we can find the right product that works for your business and help you plan for the cost of borrowing.

How we can help

We can advise you if an application is the right course and what the correct product for your current circumstances would be. With so many lenders to choose from, each with differing terms and conditions, it can seem daunting to find what you need. 

We’ve helped many businesses find the right cashflow solutions and we can help you navigate the recovery loan scheme to give your business a financial boost. 

Give us a call to discuss which options might work for you.