Recovery Loan Scheme

Recovery Loan Scheme In the budget of 3rd March the chancellor announced a successor to the Coronavirus Business Interruption Loan Scheme, being the Recovery Loan Scheme. As yet the finer details of the scheme are a little sketchy. The broad details show the scheme as keeping close to CBILS, there are a few key parts […]

March 4th, 2021

Recovery Loan Scheme

In the budget of 3rd March the chancellor announced a successor to the Coronavirus Business Interruption Loan Scheme, being the Recovery Loan Scheme.

As yet the finer details of the scheme are a little sketchy. The broad details show the scheme as keeping close to CBILS, there are a few key parts missing.

The big thing to bear in mind. You will be paying interest from day one with the Government providing a guarantee to the lender, but not paying any of the lender fees or interest. If it is a choice, then apply and use CBILS now.

If we remember when CBILS was launched that the terms around personal guarantees and residential property as security were quickly changed, we then had the Bounce Back Loan Scheme which launched to bridge a gap. There appears to be a keenness to avoid a similar round of changes this time.

With regard security and personal guarantees, watch this space. It is the big conversation piece with some disagreement over the level of risk business owners should be responsible for.

We also wait to see whether existing CBILS facilities come into the equation.

We wait and see…

Recovery Loan Scheme

For now the details are:

Up to £10m facility per business: The maximum value of a facility provided under the scheme will be £10m per business. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts
Turnover limit: There will be no turnover restriction for businesses accessing the scheme.
Wide range of products: Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities
Term length: Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years
Interest and fees to be paid by the business from the outset: Businesses will be required to meet the costs of interest payments and any fees associated with the facility
Access to multiple schemes: Businesses who have taken out a CBILS, CLBILS or BBLS facility will be able to access the new scheme, although the maximum they are allowed to borrow will depend on their lender’s assessment and scheme requirements
Credit checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants
When making their assessment, lenders may overlook concerns over short-to-medium term performance owing to the pandemic

Timescales

Bearing in mind that CBILS ends on 31st March we are expecting details of the new Recovery Loan Scheme to be confirmed over the next 10 days, as soon as we know then we will be communicating this.

For now, any questions or if you want to pre-register your interest then please get in touch:

Fill out my online form.

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.