Covid-19: Could the Recovery Loan Scheme support your business?

The Recovery Loan Scheme could help your business recover and restart after the Covid-19 pandemic, the Government has suggested.

The new scheme, set to replace the existing coronavirus finance initiatives, is intended to help businesses of all sizes and sectors return to profitability.

According to the scheme details, the initiative will ensure all businesses – regardless of turnover – can access loans and alternative forms of finance (such as overdrafts, asset finance and invoice finance) of up to £10 million to support cash flow and fund growth and investment.

Like the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS), the Government will guarantee 80 per cent of the loan – making it easier to access essential finance.

Alongside the Recovery Loan Scheme, the new ‘Future Fund: Breakthrough’ initiative will also be launched. Replacing the existing Future Fund, the scheme will continue to support high-growth innovative firms that are pre-revenue or pre-profit.

Commenting on the launch of the scheme, Catherine Lewis La Torre, Chief Executive of the British Business Bank (BBB), said: “The Chancellor has confirmed the British Business Bank’s central role in the next phase of the UK’s economic recovery from Covid-19. As businesses begin to plan for the post-Covid period, they will need targeted finance to support them.

“We welcome the announcement of two new schemes, one to provide debt finance to a broad range of businesses, and the other to invest equity alongside the private sector in fast growing innovative firms. Both schemes will help drive the innovation and growth needed to support the UK’s long-term prosperity.”

The Recovery Loan Scheme is set to open on 06 April and will run until 31 December, while the Future Fund: Breakthrough scheme will launch in “early Summer 2021”.

For help and advice with related matters, please get in touch with our expert corporate finance team today.

Posted in Business, Covid-19 - Loans, Grant and Deferrals, News.