The UK government has announced a new government-backed loan scheme, aimed at supporting UK businesses as they recover from the economic impact of the COVID-19 pandemic. 

What is the COVID-19 Recovery Loan Scheme?

The Recovery Loan Scheme is to help businesses of any size access loans and other kinds of finance so they can recover after the pandemic and transition period.

How is the COVID-19 Recovery Loan Scheme Helps?

The amount is available up to £10 million per business. The actual amount offered and the terms are at the discretion of participating lenders.

The government guarantees 80% of the finance to the lender. As the borrower, you are always 100% liable for the debt.

• term loans or overdrafts of between £25,001 and £10 million per business
• invoice or asset finance of between £1,000 and £10 million per business

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.

What is the duration of the scheme?

The scheme is open until 31 December 2021 and a subject to review.

According to the government, the maximum length of the facility depends on the type of finance you apply for and will be:

• up to 3 years for overdrafts and invoice finance facilities
• up to 6 years for loans and asset finance facilities

Loans are available through a network of accredited lenders, listed on the British Business Bank’s website.

Who is eligible for the scheme?

You can apply for a loan if your business:

• is trading in the UK.

You need to show that your business:

• would be viable were it not for the pandemic
• has been adversely impacted by the pandemic
• is not in collective insolvency proceedings (unless your business is in the scope of the Northern Ireland Protocol in which case different eligibility rules may apply)

A business that received support under the earlier COVID-19 guaranteed loan schemes is still eligible to access finance under this scheme if they meet all other eligibility criteria.

Who is not eligible for the Scheme?

Businesses from any sector can apply, except:

• banks, building societies, insurers, and reinsurers (but not insurance brokers)
• public-sector bodies
• state-funded primary and secondary schools

Note: Further information will be updated in due course. 

How Taj Accountants Can Assist You:

As your reliable Small Business Accountants in East London, Taj Accountants aims to help you in all areas of your business accounting management and find the most suitable solution for your business, as per your requirements. Our specialized team of accounts is dedicated and always makes sure that our clients stay well informed and well advised about the financial matters of their companies. Contact us anytime. Our contact information is available on our website. 

DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you contacting Taj Accountants for further assistance.