It’s fair to say that the Covid-19 pandemic caused disruption to businesses across the UK. Many were forced to shut their doors and had no idea when they could reopen while many sadly had to close down.
The government implemented a whole range of measures to help ease the financial burden that came with managing these closures and one part of the set of measures it brought in was the Recovery Loan Scheme
What is the Recovery Loan Scheme
There were many different finance options available to businesses during the pandemic but one that has proved to be useful is the Recovery Loan Scheme.
The scheme was made available to businesses, regardless of their size and its aim was to ensure that they could access the finance they need to recover following the impact of the pandemic.
Every business has the scope to access up to £10 million although the amount they will be given is down to the lenders that form part of the scheme. The lenders consisted of banks and such, while the government guaranteed 80% of the finance, which meant that the risk to the lender was low. However, any business that chose to make use of the scheme would be responsible for repaying 100% of the debt.
In order to be considered eligible for the loan, businesses had to be located in the UK and had to be impacted by the pandemic.
What is Next With the Scheme?
The government announced in the Autumn Budget 2021, that the scheme would be extended and so, the end date was changed to the 30th June 2022. There were some changes that were implemented from the 1st of January 2022 and this included:
- The scheme was only available for businesses that had a turnover of less than £45m per year
- Businesses could only access a maximum of £2 million with Groups having access to £6 million
- The guarantee from the government to lenders would be reduced to 70%
While the scheme is ending on 30th June 2022, it is still open for applications and the amount that businesses can access will be determined by those lenders that are part of the scheme.
The pandemic might have taken a different direction in the UK but businesses are still suffering from those early days. Of course, the virus is still circulating which means staff levels can fluctuate and that can impact businesses, which means that they might still want to take advantage of the scheme.
The loans are available via a number of lenders that can be found on the British Business Bank’s Website. However, it is important to remember that while the scheme is hugely helpful, your business will be liable for repaying the debt. Therefore, you should make sure that you can repay the debt should you opt to apply. The good news is that with the scheme ending on the 30th of June, it looks as though the pandemic is moving closer to coming to an end.