During the coronavirus outbreak, many UK businesses have received financial support from loan schemes backed by the government. These have included the Coronavirus Large Business Interruption Loan Scheme, the Coronavirus Business Interruption Loan Scheme, and the Bounce Back Loan Scheme, which together have provided more than £75 billion worth of funding to enterprises.
As of March 31 this year, new applications for these schemes closed. However, further assistance is available for firms in the form of the Recovery Loan Scheme. In the following sections, we’ll take a closer look at this replacement scheme, what kind of assistance it offers and what type of businesses may be eligible to apply for its aid.
How does the Recovery Loan Scheme work?
The scheme is administered by the British Business Bank, and loans are made available via a network of accredited lenders. Enterprises seeking a loan from the scheme are urged to initially apply using a finance provider of their own who can deal with the bank. Recovery Loan Scheme lenders can offer businesses an extensive selection of options, including overdrafts, asset finance facilities, term loans and invoice finance facilities.
Firms are able to borrow a maximum of up to £10 million per enterprise, with a set £30 million maximum per group. The sizes of minimum facilities vary from £25,001 for overdrafts and term loans £1,000 for invoice and asset finance.
What businesses are eligible for the Recovery Loan Scheme?
To meet the scheme’s criteria, businesses must be able to certify they have been adversely impacted by the COVID-19 pandemic. They must be based here in the UK and generate over 50 per cent of their turnover from UK trading activity. Businesses must also present a borrowing proposal considered viable by a lender, and they must not be involved in any insolvency proceedings.
Additionally, all eligible businesses will need to pass standard customer checks, including Know Your Customer, anti-money laundering, fraud and credit assessments.
Businesses that are not eligible for loans via the scheme include public sector bodies, building societies, banks, insurance companies and primary and secondary schools that are state funded.
A bespoke accountancy service built for your business
Whether you’re looking for a small or family business accountant in South Yorkshire or you run your own business as a sole trader, at Adaptive Accountancy, we can help. With extensive experience of working alongside a diverse range of clients, we have an in-depth understanding of the financial difficulties many business professionals have been dealing with since the outbreak began back in March 2020.
It’s our ongoing ambition to ensure affordable accounting is always available to everyone, from family businesses safeguarding their enterprise for the next generation to self-employed professionals and entrepreneurs cutting a new career for themselves in the current climate.
You might be experiencing difficulties integrating your business loans into your everyday accounting or struggling to understand the complexities of your tax return, but either way, you can depend on our dedicated team for any assistance required.