The Recovery Loan Scheme launched in April - offering 80% government guarantee and interest rate cap for businesses affected by Coronavirus trading restrictions.
The new loan replaces earlier loan scheme and originally available until December 31, Chancellor Rishi Sunak extended the scheme in his Autumn Budget.
The Recovery Loan Scheme has been extended until 30 June 2022.
From 1 January 2022, the following changes will come into force:
- The scheme will only be open to small and medium sized enterprises
- The maximum amount of finance available will be £2 million per business
- The guarantee coverage that the government will provide to lenders will be reduced to 70%
These changes will apply to all offers made from 1 January 2022.
Until then, businesses – ranging from coffee shops and restaurants, to hairdressers and gyms – and can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000.
A new Recovery Loan Scheme replaces the existing government guaranteed schemes that closed at the end of March. Details on how to apply here.
The Recovery Loan Scheme replaces the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.
The end date for these loan schemes had been due to close at the end of January 2021 but had been extended until March 31.
The Chancellor of the Exchequer, Rishi Sunak, said: "As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis."
The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes – such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme – put into place last year.
