The Recovery Loan Scheme can be divided in several different “lending facilities”, this one is going to be looking at Recovery Loan Overdrafts (Revolving Credit).
The scheme itself does have several other options that can be taken by business owners:
An Overdraft or Revolving Credit is there if the balance of your account falls below zero and you can draw on the agreed funds as and when you require.
Overview of Recovery Loan Overdraft:
Start and End Dates
- Launch Date: 6 April 2021
- Available Until: 31 December 2021
May be Extended
What Can I Use the Money For?
- Cashflow
- Investment
- Growth
In Layman’s Terms – Any Legit Business Purpose
How Much Can I Apply For?
- Minimum £25,001.00
- Maximum £10,000,000.00
If That is Too Much Consider Asset or Invoice Finance
Other Bits n Bobs Worth Knowing:
- No Turnover Restriction for Applicants
- Overdraft Term is 3 Years
- Applicant Pays All Fees/Interest
- Applicants Will Be Credit Checked*
*Lenders Have Discretion to Lend or Not and Can “Overlook” Things
Government Guarantee
The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses. That means the accredited lenders should set their interest rates with that guarantee in mind and not take the p*ss.
The scheme is called the Recovery Loan Scheme after all and should be designed by lenders to ensure business owners can access the scheme, can get the funds swiftly and is not simply a way for those lenders to cash in on the suffering of those business owners and their need to access business related finance to help their businesses survive and “recover”.
Eligibility
You will be able to apply for a loan if your business:
- Is trading in the UK
You will need to show that your business:
- Is viable or would be viable were it not for the pandemic
- Has been impacted by the coronavirus pandemic
- Is not in collective insolvency proceedings – further details will be provided in due course
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.
No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
Recovery Loan Scheme Revolving Credit/Overdraft Lenders
Please be aware that until the official announcement of the Recovery Loan Recovery Loan Overdrafts (Revolving Credit) Lenders I have listed below the CBILs Lenders who offered that facility (when CBILs were available), to give you an idea of the most likely suspects to be accredited. Once the lenders are announced the section below will spring to life.
The “Comments” box will be filled in once I receive feedback from those applying with the respective lenders. I have no problem whatsoever shaming any bank/lender that starts ripping off business owners with sky high interest rates and/or fees, or pulls any stunts, many lenders/banks did pull stunts and tortured many of their customers during the Bounce Back Loan Scheme and will be shamed accordingly if they do so during this scheme.
| Lender | Status | Website Link | Comments |
|---|---|---|---|
| Arbuthnot Latham | ACCREDITED | Arbuthnot Latham Website | |
| Ebury | ACCREDITED | Ebury Finance Website | |
| Oaknorth Bank | ACCREDITED | Oaknorth Bank Website |
You are strongly advised to think long and hard about making use of the Recovery Loan Scheme and seek professional financial/legal advice if you are thinking about doing so.