The Budget saw the launch of a new loan scheme to support access to finance for UK business as they grow and recover from the disruption of the Covid-19 pandemic.
The Recovery Loan Scheme aims to ensure businesses of any size can continue to access loans and other kinds of finance up to £10million.
The scheme will launch on April 6 and will replace the existing Bounce Back loans and Coronavirus Business Interruption Loan (CBIL) which close for new applications at the end of March.
More details on the scheme will be published shortly, including how to apply and details of accredited lenders.
Once received, the finance can be used for any legitimate business purpose, including growth and investment.
The government is guaranteeing 80 per cent of the finance to the lender and the scheme will be open until December 31, subject to review.
What type of finance is available?
Term loans and overdrafts will be available between £25,001 and £10m per business.
Invoice finance and asset finance will be available between £1,000 and £10m per business.
Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
Businesses will be able apply if they are trading in the UK and will need to show they are viable or would be viable were it not for the pandemic
They will also have to show they have been impacted by the coronavirus pandemic and are not in collective insolvency proceedings.
Businesses that have received support under the existing Covid-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.
The previous schemes have seen almost 1.6 million approved facilities lending almost £74bn to businesses to support them through the coronavirus pandemic.