New Recovery Loan Scheme launches to kickstart economy post-lockdown

The chancellor Rishi Sunak has launched a new loan scheme to support those businesses that need it.

Rishi Sunak

The Recovery Loan replaces a string of earlier scheme, including the Bounce Back loans which have lent more than £46bn in the last 12 months.

With non-essential retail and outdoor hospitality reopening next week, ministers have made the new scheme available to businesses to help protect jobs.

A wide range of businesses can access loans varying in size from £25,000, up to a maximum of £10m. Invoice and asset finance is available from £1,000.

Sunak commented: “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 30 September, and the New Restart Grants scheme launched last week, providing funding of up to £18,000 to eligible businesses.

The scheme, which was announced at budget and runs until 31 December 2021, will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders.

Some 26 lenders have already 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.

Kwasi Kwarteng

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 1.6 million British businesses and this new scheme will build on that success.

Business secretary Kwasi Kwarteng said: “We’re doing everything we can to back businesses as we carefully reopen our economy and recover our way of life.The launch of our new Recovery Loan Scheme will provide businesses with a firm foundation on which to plan ahead, protect jobs and prepare for a safe reopening as we build back better from the pandemic.”

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