The new Recovery Loan Scheme is set to support retail businesses, enabling Government-guaranteed finance throughout 2021. With a funding pot of £75 billion, the Recovery Loan Scheme is designed to help those in the retail industry as they work towards reopening successfully after the most recent lockdown.
How does the Recovery Loan Scheme work?
This scheme will provide additional finance for businesses that need it. This finance can be used for any legitimate business purpose; whether it’s to help manage cashflow, for investment, or to enable growth. Here’s what it means:
- Businesses can access loans ranging from £25,000 to £10 million
- Invoice and asset finance is available from £1,000
- Loans will include 80% government guarantee
- There is an interest rate cap at 14.99%
Administered by the British Business Bank, there is a wide range of accredited commercial lenders offering these loans, with 26 being accredited from day one of the scheme and more expected to join imminently. Accredited lenders include Barclays, HSBC, Lloyds Bank, RBS, NatWest, Yorkshire Bank and Santander.
The objective of the Recovery Loan Scheme is to offer the best terms possible for a loan, meaning if they are able to offer an option to give a commercial loan on better terms, without requiring the RLS guarantee, they should give this option.
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 business 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.”
Does the Recovery Loan Scheme replace other support?
The Recovery Loan Scheme has been designed to run alongside other emergency schemes, such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme that came into effect last year.
How to apply for the Recovery Loan Scheme
You can apply for the Recovery Loan Scheme directly through your chosen lender.
What other support is available?
There are many other types of support for retail businesses, including the furlough scheme that has been extended until 30 September 2021 and the New Restart Grants of up to £18,000 for eligible businesses.
Holly brings a wealth of experience in both print and digital publishing. As Modern Retail’s Content Editor, Holly is passionate about helping independent retailers to thrive in today’s ever-changing market.