A NEW Government-backed loan scheme launches today to provide additional finance to those businesses that need it following the pandemic.
The Recovery Loan Scheme will ensure businesses continue to benefit from Government-guaranteed finance throughout 2021.
A Government spokesperson said: “With non-essential retail and outdoor hospitality reopening next week, Ministers have ensured that appropriate support is still available to businesses to protect jobs.
“From today, businesses – ranging from coffee shops and restaurants, to hairdressers and gyms – and can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is available from £1,000.”
Chancellor of the Exchequer Rishi Sunak, said: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and as the situation has evolved we have ensured that our support continues to meet businesses needs.
“As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.
“This is in addition to furlough being extended until September 30, and the New Restart Grants scheme launched last week, providing funding of up to £18,000 to eligible businesses.
“The Government is also supplementing this with the Plan for Jobs, focused on protecting, supporting and creating jobs across the country through the Kickstart scheme, T-level and a National Careers Service.
“The scheme, which was announced at budget and runs until December 31, 2021, will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders.
“To date 26 lenders have been accredited for day one of the scheme, with more to come shortly, and the Government will provide an 80% guarantee for all loans. Interest rates have been capped at 14.99% and are expected to be much lower than that in the vast majority of cases, and Ministers are urging lenders to ensure they keep rates down to help protect jobs.
“The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes – such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme – put into place last year.
“So far, the Government’s emergency loan schemes have supported more than £75bn of finance for 1.6m British businesses and this new scheme will build on that success. This is part of the government’s unprecedented £350 billion support package which has included paying millions of workers’ wages through the furlough scheme and generous grants and tax deferrals.
Rain Newton-Smith, CBI Chief Economist, commented: “The coronavirus loan schemes have provided a critical lifeline to businesses, and so its successor – the new Recovery Loan scheme – comes as a huge relief to firms.
“These loans can be taken alongside existing Covis loans to help firms refinance, restructure and go for growth.
“It’s vital support remains as restrictions relax and demand returns to normal, allowing businesses to recover, save jobs, and support for reopening.”