What is the Recovery Loan Scheme?
The Recovery Loan Scheme (RLS) essentially provides financial support to UK businesses as they recover after being impacted by the pandemic, and now has some new changes. The scheme came into force on the 6th of April 2021, and was meant to run until the 31st of December 2021. This has now been extended, which will be mentioned later on in the blog as one of the major changes of the scheme. It was expected to be extended when it was first launched. The funding itself is used for allowing businesses to access loans or other types of finance.
There is a limit of £10 million available per business. However, the amount that is actually offered depends on the terms which are provided at the hands of the discretion of all participating lenders. As it’s a government scheme, the government guarantees 80% of the finance to the lender. However as the borrower, you will be 100% liable for the debt.
Are you eligible?
Only UK businesses (those who are trading in the UK) are eligible to apply for the Recovery Loan Scheme. There are some criteria laid out by the government website which include needing to show:
- your business would be possible and feasible if it wasn’t for the pandemic and it’s impacts
- that your business has been badly negatively impacted by the pandemic
- your business is not involved in collective insolvency proceedings
What are the changes from the 1st of January 2022?
The main change that came into force was that the scheme will be extended until the 30th of June 2022. This was announced in the Autumn 2021 budget.
There was also a handful of other changes as seen below:
- The scheme will only be open to SME’s
- The maximum amount of finance available is lowered from £10 million to £2 million per business
- The guarantee coverage provided to lenders will be reduced to 70%
All these changes to the Recovery Loan Scheme will apply from the 1st of January 2022.
Contact Us
If you would like any more information on what we can offer you and your business here at WestWon, then please don’t hesitate to get in touch with us. Either give us a call on 01494 611 456 or alternatively email us on hello@westwon.co.uk. You can also visit our contact page for additional ways to find or contact us.