Recovery Loan Scheme

Information about the latest iteration of the Recovery Loan Scheme that will help businesses get the funding they need to expand and invest has been released.

The Recovery Loan Scheme that provides small businesses with government-backed loans has been extended for an additional two years.

In April 2021, the Recovery Loan Scheme was first introduced to aid businesses in their recovery from the coronavirus (COVID-19) pandemic. On June 30, 2022, the application period for the programme ended.

To assist businesses in obtaining financing as they seek to expand and invest, a new version of the programme is being introduced in August. The revised plan will be in effect until June 2024.

The revised programme will continue to provide businesses with a variety of funding options to help with cash flow, including:

• Term loans and asset financing options with terms ranging from three months to six years
• Overdrafts and invoice financing are available from three months to three years

The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.

Small businesses outside the scope of the Northern Ireland Protocol will be able to borrow up to £2 million.

Borrowers in scope of the Northern Ireland Protocol may borrow up to £1 million unless they operate in a sector where aid limits are reduced – in which case the maximum that can be borrowed is subject to a lower cap.

Even though the borrower is still solely responsible for repayment, the government will continue to provide a 70% guarantee to the lender.

The main adjustment to the scheme is the requirement for a personal guarantee from borrowers. Personal guarantees can now be taken at the lender’s discretion, in line with their normal commercial lending practices.

For more information on the scheme including details on the eligibility criteria please head over to the British Bank website.