There are many businesses that have benefited from the recovery loan scheme that has been provided by the government.
Back in 2021, the Chancellor determined that the Recovery Loan scheme would give businesses in the UK, no matter how large or small they were, money in order to cover their losses because of the pandemic. Once they had received this money, they would be able to recover, invest, and grow.
Once this was launched, there were many loan schemes were introduced and ended. It allowed people to get money in the form of loans, finances, overdrafts, all the way up to £10 million from accredited lenders with an 80% guarantee that they would get the money.
It was not until the Chancellor decided in June 2022, due to the Autumn Budget, that scheme would change at the beginning of the year, providing finances for up to £2 million for businesses with the 70% guarantee directly from the government.
The Growth Hub’s Access to Finance team was able to work with Lancashire and companies in the Greater Manchester area to get fully funded support and other sources of financing.
What types of financial products were actually available?
Types of finance
Term loans between £25,001 and £2 million per business up to 6 years
Overdrafts between £25,001 and £2 million per business up to 3 years
Asset finance between £1,000 and £2 million per business up to 6 years
Invoice finance between £1,000 and £2 million per business up to 3 years
Key points to consider
This would come to a close at the end of June and 2022.
There was an outline of how repayments would occur, including interest payments, for each loan.
Applicants would be subject to various checks to ensure that their credit was found and fraud did not occur. Lenders, during this time, would overlook certain concerns simply because of the pandemic.
For those that wanted to get up to £250,000, no guarantees could be made personally by the lenders.
In addition to this, the private residence of a borrower cannot be used as any form of security.
Is my business eligible to apply?
To apply for a loan, you must:
You must have a business that is trading in the UK,
You must demonstrate that your business:
Is it viable, or would it be so, if the pandemic did not exist
Has been impacted as a result of the pandemic
Is not insolvent or going through insolvency proceedings
Note: from the beginning of January and 2022, businesses would only be able to access this scheme if they could show that their turnover was not in excess of £45m per annum.
In all sectors, recovery loans were available, except in the following places:
With the exception of insurance brokers, insurers, building societies, and banks in the private sector were able to apply for this money.
Secondary schools and primary schools were state-funded.
Note: Eligibility for this type of loan is possible even for those that have received CBILS, BBLS, or CLBILS funding.
Eligibility criteria are often presented in the FAQs from those that we’re offering this type of funding, including those that are published on the British Business Bank website.
Is it possible to apply now?
For those that would like to take advantage of current loan options available from accredited direct lending, courtesy of the Recovery Loan Scheme should go to the British Business Bank website for more information.
Note: recovery loans are available from most lenders, but not all of them, and this will include virtually any type of finance scheme that is available; plus you need to consider the amount of the finance that may vary depending upon the lender you were consulting with to get the funding.