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business recovery loan scheme

business recovery loan scheme has extended their deadlines

Recovery loan scheme has extended their deadlines to June 2022

The business recovery loan scheme is the financial option that any UK business might consider worth pursuing no matter where they stand on the company’s growth path.

The business recovery loan scheme is introduced as a COVID-19 relief fund plan created to provide relief for businesses that have suffered significant losses due to the disruption.

£10 million was accessible to businesses before 01 January 2022; it was changed to £2 million after 01 January 2022; businesses can get such an amount depending on the lender they choose. Such lenders are fully authorised and screened by the British Business Bank. 

Businesses can rely on this when getting a business loan. The Government will assure 80% of the loan as a lender, and the company needs to pay back 100% as a borrower.

Finance decisions are made individually because every business case is different. So, it is best to speak with an advisor at the British Business Bank or with any of its lenders who can give you more details regarding how much they can offer you.

Business recovery loan schemes are great because they accommodate most businesses. Although there may be a limit on how much money one can borrow from a business recovery loan scheme. The Government recovery loan scheme has extended its deadlines for borrowers to 30 June 2022 from 01 January 2022

Government Implementing changes from 01 January 2022 to 30 June 2022

The changes will come into effect as of 01 January 2022 and will affect businesses that are just starting under this restructured set of rules.

  • They may receive up to £2 million in financing.
  • A maximum amount of financing given per business group is capped at £6 million with a guarantee provided by the Government covering 70% instead of 80% of losses sustained by banks.
  • And business recovery loan scheme will only open to those businesses having their turnover not more than £45 million per annum.

Our accountants have years of expertise in accounting and financial advice will assist you in answering and managing your enquiry to ensure the optimal outcome.

Who is Eligible for a business recovery loan scheme from January 2022?

To qualify the eligibility for the recovery loan scheme.

  • Businesses must still be trading in the UK.
  • They must also prove that the disruptions caused by covid-19 have reduced their profits but were also viable before the pandemic hit.
  • Furthermore, businesses are also required to be free from bankruptcy proceedings.
  • However, smaller companies that fall within the scope of the Northern Ireland Protocol may experience different eligibility requirements set by the Government.

Small businesses in the UK can now take advantage of business recovery loan schemes to help finance expansion plans, new equipment, or exploring additional premises.

The British business bank has compiled a list of lenders on its website. It even allows users to sort according to lender ratings or location so that companies can quickly find what they need. 

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Key features of the business recovery loan scheme

  • The bank can provide companies with term loans or overdrafts of £25,001 and £10 million.
  • The amounts for asset finance and factoring are flexible, reaching the max quantity of £1000 and £10 million, respectively.
  • If feasible, the personal guarantee will not be granted on loans that exceed £250,000, and the borrower’s personal property is not employed as collateral.
  • If borrowed less than £250,000, the lender won’t ask for the submission of any personal assurance.
  • If borrowed more than £250,000, the lender has the preference and can decide whether to take personal guarantees or not.
  • The amount that can be covered under the recovery loan scheme is limited at a maximum of 20% of the balance remaining of the recovery loan scheme facility following the sale of business assets.
  • The term period for loans, asset finance, and factoring is three months to six years.
  • The term period for overdrafts and invoice finance is three months to three years.

Interested applicants for the business recovery loan scheme must know about any interest and fees charged from the beginning.

As a condition of a business recovery loan scheme, businesses must meet the expenditure on business loans. The effective annual interest rate, the amount of upfront fee and other outstanding amounts cannot exceed 14.99%.

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