Government to extend Recovery Loan Scheme
Posted: Wed 20th Jul 2022
The UK government has announced it is extending the £4.5bn Recovery Loan Scheme (RLS) until June 2024.
The British Business Bank said it will reopen to applications in August and run until 30 June 2024. Like the original scheme, which closed on 30 June, businesses will be able to borrow up to £2m and it will include loans, overdrafts, asset finance and invoice finance.
Recovery Loan Scheme
The Recovery Loan Scheme was launched in April 2021 to replace the previous coronavirus schemes including Bounce Back Loans. It provided a 80% government guarantee on loans of up to £2m made before 1 January 2022 and 70% for finance after that.
The new version is less generous. The government guarantee will still be 70% but a Department for Business, Innovation and Skills press release said:
"Recognising that businesses and the UK more generally are now in a better position than they were during the pandemic, lenders may now require a personal guarantee from the borrower, in line with standard commercial practice."
Chancellor Nadhim Zahawi commented:
"Small businesses are the engines of economic growth, supporting jobs and livelihoods in communities right across the UK.
"The Recovery Loan Scheme has supported thousands of businesses over the past year and this extension will ensure they continue to access the finance they need to navigate the months ahead."
Emma Jones, founder of Enterprise Nation, said:
"Our latest Small Business Barometer found more than half of small businesses are looking for finance over the next 12 months.
"This refreshed scheme is a measured solution for businesses that still look to government-backed financial support schemes to help them through the challenges ahead or meet their growth ambitions."
New figures released today showed accredited lenders offered over £4.5bn to SMEs through the Recovery Loan Scheme. Of that, £3.83bn has been drawn down through 18,338 facilities.
RLS has supported around 16,000 English businesses, 1,000 businesses in Scotland, 600 Welsh businesses and 300 in Northern Ireland.