Companies can now access the £75bn Recovery Loan Scheme. The scheme opened on 6th April and is available to all companies effected by the Covid-19 pandemic. Critically companies who have used CBIL and Bounce Back facilities can also apply.
As a broker we found with the CBIL schemes our clients needed assistance is looking for the most suitable provider for their circumstances. Blue Sky Finance are actively involved with the Loans and Asset Finance that are supported by the Recovery Loan Scheme. We have a variety of Banks and Leasing companies who are offering the scheme to clients.
How Does the Scheme Work?
For amounts over £250,000 the lender has the discretion to decide whether to take personal guarantees. However, above £250,000 the maximum amount that can be recovered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied.
The scheme is capped at a total loan facility of £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts.
The annual effective rate of interest, upfront fee and other fees cannot be more than 14.99%
It is important to note that no personal guarantees can be held over principal private residences.
Lenders will be required to undertake standard credit, fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks for all applicants. When making their assessment lenders may overlook concerns over short-to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.
How to use the scheme?
In the first instance we will need to get the right background information to ensure you have the best chance of successfully obtaining the facility. The information is likely to include;
- Management Accounts
- Last Files Accounts
- Cashflow forecasts moving forward
- Business Bank Statements
- Assert Details or Purpose of the Loan
The CBIs chief economist has said: ” The coronavirus loan schemes have provided a critical lifeline to business. So its successor-The new Recovery Loan scheme-comes as a huge relief.”
With both the launch of the Recovery scheme, the new super allowance for companies and 100% capital allowances with minimal benefit in kind for company electric cars the UK really does have a fantastic array of support for business Investment. At Blue Sky Finance we would like to work with all our clients to help you access these schemes and both support and grow your businesses. We look forward to helping and speaking in the near future.