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Details have been released of the latest iteration of the government-backed Recovery Loan Scheme to help businesses invest and grow out of the Covid-19 pandemic.
The scheme, which was launched in April 2021, was extended by the Chancellor for a further two years in July after having already provided over £455 million to businesses in the North-west region alone, and £4.5 billion nationally.
The British Business Bank will administer the scheme on behalf of the of the Secretary of State for Business, and participating lenders will be listed on their website.
The Recovery Loan Scheme will provide facilities of up to £2 million per business group (£1 million for those under the scope of the Northern Ireland Protocol), with a minimum facility of £1,000 for asset and invoice financing and an annual effective rate of interest no more 14.99%.
For lenders, the scheme provides a 70% government-backed guarantee against the outstanding balance of the facility; however, the borrower remains 100% liable for the debt and personal guarantees can also be taken, excepting Principal Private Residences.
Businesses with a turnover of below £45 million and with trading activity based in the UK are eligible for the scheme. No Covid-19 impact test is required, unlike in previous iterations of the scheme, but lenders may consider that the borrowers have a viable business proposition.
Businesses that took out other Covid-19 support (including a Coronavirus Business Interruption Loan, Bounce Back Loan or Recovery Loan) prior to the 30th June are also eligible to access further support via the updated Recovery Loan Scheme.
When the extension to the Recovery Loan Scheme was announced, Business Secretary, Kwasi Kwarteng, said:
“Small businesses are the lifeblood of the British economy, which is why we are determined to support our traders and entrepreneurs in dealing with worldwide inflationary pressures.
“The extension of the Recovery Loan Scheme will help ensure we continue to provide much-needed finance to thousands of small businesses across the country, while stimulating local communities, creating jobs and driving economic growth in the UK.”