Yesterday, 6 April, saw the launch of a new government-backed loan scheme to provide additional finance to those businesses that need it.
- New loan scheme will provide further support to protect businesses and jobs
- Loans will include 80% government guarantee and interest rate cap
With non-essential retail and outdoor hospitality reopening next week, the Recovery Loan Scheme aims to ensure that appropriate support is still available to smaller businesses by providing them with additional finance to manage cashflow, growth and investment as they steer a path towards a sustainable recovery.
Businesses, ranging from coffee shops and restaurants, to hairdressers and gyms, can access loans varying in size from £25,000, up to a maximum of £10 million. Invoice and asset finance is also available from £1,000, subject to the lender being accredited for each of these finance types.
The scheme, which runs until 31 December 2021, will be administered by the British Business Bank, with loans available through a diverse network of accredited commercial lenders. The government will provide an 80% guarantee for all loans, and interest rates have been capped at 14.99%, with the government urging lenders to ensure they keep rates down to help protect jobs.
Adding to this, the new Restart Grants Scheme has now launched, aimed at supporting businesses in the non-essential retail, hospitality, leisure, personal care and accommodation sectors with a one-off grant, to reopen safely as COVID-19 restrictions are lifted.
Local councils will use their discretion to determine whether businesses meet the eligibility criteria for this grant scheme and those approved will be paid as follows:
- Eligible businesses in the non-essential retail sector may be entitled to a one-off cash grant of up to £6,000 from their local council
- Eligible businesses in the hospitality, accommodation, leisure, personal care and gym sectors may be entitled to a one-off cash grant of up to £18,000 from their local council
Businesses should visit their local council’s website to check eligibility and find out how to apply. Find the website for your local council.
For further information about the government measures to protect individuals and businesses, visit our COVID-19: Support for UK businesses hub.