The original coronavirus loan schemes that provided invaluable emergency funding from the beginning of the pandemic are ending on 31st March 2021. The government is shifting its focus to business recovery and growth, and a new scheme is being launched on 6th April 2021.
The new Covid-19 Recovery Loan Scheme provides businesses of all sizes with vital financing to grow and develop in a post-pandemic world. It’s designed to be flexible and easy to access, with a range of funding options available.
So how does the Recovery Loan Scheme work, and what are the eligibility requirements?
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If you are a limited company director worried about how you are going to repay your Bounce Back Loan, we are here to help. As licensed insolvency practitioners we can talk you through your options when it comes to repaying your outstanding Bounce Back Loan, as well as handling all negotiations with creditors on your behalf. Call our team today on 0800 063 9262 .
The government has provided an 80% guarantee for all loans under this scheme. This is intended to encourage finance providers to lend to businesses after the lockdown has lifted, but it remains the borrower’s responsibility to repay the money in the event of default.
Loan terms range from three years to six years depending on the type of funding used. You have a choice of:
In a similar way to Bounce Back Loans and Coronavirus Business Interruption Loans, there will be a choice of accredited lenders involved in the Recovery Loan Scheme. If you obtain a term loan or asset finance, it’ll be on terms of up to six years. For overdrafts and invoice finance, the facility will run for up to three years.
Additionally, lenders won’t be able to demand a personal guarantee from you as a director for loans under £250,000. For any lending over this amount, your Principal Private Residence cannot be used as security.
The eligibility requirements for Recovery Loans include:
The Recovery Loan Scheme is available to businesses of any size that meet these criteria. It can provide the type of funding needed for businesses in all industries to evolve and prosper post-coronavirus.
You can apply for a Recovery Loan if you’ve already received other forms of government coronavirus funding. There’s no interest-free period with the Recovery Loans as there was with the other coronavirus loan schemes, however, and you’ll be required to pay associated fees.
The new scheme is set to end on 31st December 2021, so how do you apply for this type of finance?
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
You can apply to your chosen lender directly for a Recovery Loan, and a list of lenders will be available on the British Business Bank website. Financiers will carry out credit checks and fraud checks, and processes may vary between different lenders.
It’s expected that lenders will take a longer-term view of business performance and suitability for this scheme – in other words, assess an application on the basis that the pandemic hadn’t happened.
If an application is sanctioned the funding can be used for any legitimate business purpose, such as growth and development, or supporting cash flow whilst the business gets back on its feet.
If you would like more information on the new Covid-19 Recovery Loan Scheme, please get in touch with our partner-led team at UK Liquidators. We operate an extensive network of offices around the country, and can offer you a free, same-day consultation.
If you are considering liquidation for your limited company, taking advice from a licensed insolvency practitioner can help you understand your options.
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If you are considering liquidation for your company, taking expert advice at an early stage is crucial. At UK Liquidators, our team of licensed insolvency practitioners are committed to providing limited company directors with the help and advice they need to make an informed decision.
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