A number of problems have been exposed with the government’s COVID Recovery Loan Scheme. Lending under the recovery loan scheme, launched by Rishi Sunak in April, is set to be a fraction of the level of previous pandemic credit schemes. Has the Recovery Loan Scheme been a flop? Hear me out on this one!
Along with reports from banks of muted demand, companies that want to access the state-backed credit are reporting difficulties in securing it. However. there are also issues with firms that want to access the state-backed funding.
Has it been successful? Has it failed? What is going on with the recovery loan scheme?
What Is A Recovery Loan Scheme?
This new loan scheme is to support access to finance for UK business as they grow and recover from the disruption of the Covid-19 pandemic was announced at the Budget. Launched on 6 April 2021, the Recovery Loan Scheme (RLS) provides financial support to businesses across the UK as they recover and grow following the coronavirus pandemic.
You can apply to the scheme if Covid-19 has affected your business. You can use the finance for any legitimate business purpose – including managing cashflow, investment and growth. However, you must be able to afford to take out additional debt finance for these purposes.
Is The Recovery Loan Scheme A Flop?
The goal was to replace financial support that allowed many businesses continue to operate during the lockdown with more than £75 billion in government-backed loans to 1.6 million borrowers when the programs expired last month.
The RLS “will ensure that firms continue to have access to the credit they need as we move out of this crisis,” said chancellor Rishi Sunak during the launch. They’re keeping the economy going still with the furlough scheme. But this scheme has really not worked.
I don’t think many businesses have got great loans from that. The lending rate is way down as a fraction of the people that took the bounce back scheme. In my community of entrepreneurs and business owners. Fortunately, they’re good at marketing. However, a lot of them, they could really benefit from a recovery loan because they could invest in stuff, they got great opportunities, and they’re just not getting access to the finance that they need
How To Apply For A Recovery Loan Scheme?
You will be able to apply for a loan if your business:
- is trading in the UK
- is viable or would be viable were it not for the pandemic
- has been impacted by the coronavirus pandemic
- and – is not in collective insolvency proceedings
Read more about it on: https://james-nicholson.co.uk/recovery-loan-scheme/
More Recovery Loan Scheme blogs HERE:
What You Need To Know About The Recovery Loan Scheme
How To Apply For The Recovery Loan Scheme Successfully