2021 Recovery Loan Program Full Update – Where Can I Apply For My Loan?
The government launched its long-awaited recovery loan program today (April 6).
Announced in last month’s budget, the recovery loan scheme (RLS) replaced the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS).
The goal of this program is to help businesses of all sizes access loans and other financing so they can recover from the pandemic and move forward. It can be geared towards improvements such as managing cash flow, growth and investments.
Up to £ 10million is available per company. Minimum funding is £ 1,000 for asset and bill funding and £ 25,001 for term loans and overdrafts. The total amount offered is at the discretion of the participating lender. They will perform credit checks and fraud checks before granting you the financing.
> See also: What is invoice financing?
The government guarantees 80% of the financing to the lender and the borrower will always be 100% responsible for the debt. The annual interest rate and upfront charges and the like cannot exceed 14.99%.
Unlike BBLS and CBILS, RLS is loaned on standard commercial banking terms. Kreston Reeves says businesses will have to pay arrangement fees and repay loans with interest upfront.
John Walsham, Business Development and Funding Consultant at Kreston reeves, Explain:
“Questions had been raised as to whether directors would be required to provide personal guarantees, and although advice was released late today, it has now been confirmed that they will not be required to borrow below. of £ 250,000.
“Lenders are expected to charge a premium at their usual rates, knowing that in many cases they will rely solely on the government guarantee as collateral.
“Businesses should note, however, that the 80% government guarantee does not mean they are exempt from loan liability. If a business defaults and a lender cannot recover the borrowed money, then they can turn to the government who will then reimburse the lender for up to 80% of the loan value. ”
The program will be open until December 31, subject to revision.
Who are the approved payback loan program lenders?
The British Business Bank (BBB) has described the approved lenders listed below.
Revolving credit (overdrafts)
How to apply
You can apply directly with your lender. Check out the links above for more details.
How long is the term?
The duration depends on the type of financing you are requesting.
- Up to three years for overdrafts and invoice financing facilities
- Up to six years for loans and asset finance facilities