The Recovery Loan Scheme is geared towards helping businesses that were affected by the restrictions imposed due to the pandemic, but have a clear chance of long-term survival and growth with adequate finance in place.Borrowing can be for any legitimate business purpose and personal guarantees cannot be taken for loans up to £250,000. Larger facilities are available but personal guarantees may be required (although can’t affect your home). Additionally, you are able to get multiple facilities with different lenders – e.g. can borrow £500,000 across two £250,000 facilities so no personal guarantee is needed.The scheme will be open until 30 June 2022. Below we outline the details of the scheme such as eligibility and what information you need to complete before you approach a lender.Details of the scheme Are you eligible for a recovery loan?Business trading in UKProof of business ‘viability’ before the pandemicProof business has been impacted by coronavirus pandemicProof business is not in insolvency proceedings What are the details of the recovery loan? Finance terms are up to 6 years for term loans and asset financeFinance terms up to 3 years for overdrafts and invoice financeNo turnover restrictionInterest and fees paid from the outsetBusinesses who have taken out CBILS and BBLS can access the scheme How much can your business borrow?Maximum loan of 25% of 2019 turnover£2m or £6m for a group (subject to a maximum turnover of £45million)With loans up to £250k there are no personal guarantees allowed which makes it attractive to perhaps consolidate other loans and even on larger facilities the guarantees are less onerousTerm loans and overdrafts between £25,001 and £10m per businessInvoice finance and asset finance between £1,000 and £10m per business What information do you need to complete before you approach a lender? Up to date annual accounts submitted to Companies HouseManagement Accounts for the period since accounting year end6, 9 and 12-month cash flow demonstrating repaying delayed VAT, PAYE etc Can you only apply for a recovery loan through your bank?Most major banks are offering recovery loansFunding Circle are also offering these loans as an alternativeTalk to us As with any lending it should be approached with caution because it can increase the risks to your business as ultimately these will need to be paid back. Having a business plan or rough cashflow forecast will be helpful in making sure your businesses is taking on the correct commitment to borrowing.Talk to us and we can assess your personal circumstances and help you come to the best decision and help you with everything you need to approach a lender. Contact me today!Emma WhiteFCAPartner01474 853856emma.white@a4g-llp.co.uk Send me a message Ask me a questionFill in your details below and I’ll come back to as soon as I can! If your enquiry is more urgent, please do give me a call. Your full name*Contact no.*Email address* Business name*Industry / Profession*Your messageOne last thing...*By ticking this box you agree to being contacted via email or phone by one of our Advisers, and for the information you provide us with to be kept securely for future communications in line with the new GDPR Yes, I agree Share this articleOther posts of interest 10th May 2020Preparing to go back to business Read more 11th December 2020Important dates for your diary Read more 29th September 2021HMRC furlough investigations – What to do if you receive a concern... Read more See more articles