All you need to know about the Recovery Loan Scheme
The government has revealed new statistics to show how the Government-backed loans have supported businesses through the pandemic – including the Bounce Back Loan scheme, which provided a loan roughly every 20 seconds since its launch last May.
The recent announcement from HM Treasury stated that:
- Three Bounce Back Loans were issued every minute since May 2020 launch
- Emergency loans provided almost £180 billion in total since March 2020
- The Covid Corporate Financing Facility (CCFF) scheme alone supported firms responsible for 2.5 million jobs
Government-backed loan figures
|Loan Type||Value of Facilities Approved||Number of Facilities Approved|
|Coronavirus Business Interruption Loan Scheme (CBILS)||£23.28bn||98,344|
|Coronavirus Large Business Interruption Loan Scheme (CLBILS)||£5.30bn||716|
|Bounce Back Loan Scheme||£46.53bn*||1,531,095|
|Covid Corporate Financing Facility (CCFF)||£104bn of commercial paper **||304|
As of 31st March, applications for CBILS, CLBILS and BBLS will close and in place; from 6th April 2021, a new Recovery Loan Scheme will be introduced.
What is the Recovery Loan Scheme?
The new Recovery Loan Scheme, running up to 31st December 2021, will provide an 80% guarantee to lenders for term loans, overdrafts, and invoice and asset finance, ensuring businesses of all sizes will continue to receive support if they need it.
What type of finance is available?
Businesses will have access to finance of up to £10 million per business, allowing companies to recover from the pandemic and continue to grow:
- Term loans and overdrafts will be available between £25,001 and £10 million per business.
- Invoice finance and asset finance will be available between £1,000 and £10 million per business.
For term loans and asset finance facilities, finance terms will run up to six years, with overdrafts and invoice terms only running up to three. Once received, a business can use the finance for any legitimate business purpose, including growth and investment.
Will I be eligible?
Regardless of whether your company has received previous support such as CBILS, CLBILS and BBLS or not, you will be eligible for the new scheme if your business is trading in the UK and can show that the company is:
- Viable or would be viable were it not for the pandemic.
- Has been impacted by the coronavirus pandemic.
- Not in collective insolvency proceedings (the government will provide further details in due course).
Unfortunately, you cannot apply if your business falls under one of the following sectors:
- Banks, building societies, insurers and reinsurers (but not insurance brokers)
- Public-sector bodies
- State-funded primary and secondary schools
How do I apply for the Recovery Loan Scheme?
The scheme is due to start on 6th April 2021; however, we are still awaiting an update from the government for further information on accredited providers.