Could your business benefit from the Recovery Loan Scheme?
In early April we saw the launch of the Recovery Loan Scheme, designed to financially support UK businesses in accessing asset finance, aiding recovery and growth in the midst of the pandemic. There’s still plenty of time to take advantage of the scheme, which will be running till December, subject to review.
Providing it’s for legitimate business purposes, the loan can be used for a range of growth enhancing reasons, from supporting cashflow to investment or finance.
How does the RLS work?
It works by allowing businesses to access products with better terms from lenders, without the need for a Government backed guarantee.
The minimum funding for an asset finance that can be applied for per business is £1000, with the maximum at £10M. This is of particular interest for CAVA Finance’s clients as one of the types of funding available is Asset Finance.
The scheme is available for Start Ups, Sole Traders Limited Partnerships, CICs and LLPs. However, there may be more suitable loans available outside of the RLS for certain types of businesses.
Does my business Qualify?
The eligibility criteria for the scheme is briefly outlined below, with further eligibility checks, such as a credit check, carried out by lenders;
- Have a viable business proposition – lender’s will use their discretion surrounding recent business performance given the impact that Covid-19 has had on businesses and cashflow
- Must be trading in the UK and generate more than 50% of it’s turnover from UK trading activity
- Be able to confirm that your company has been impacted by Covid-19
How can CAVA Finance help?
CAVA Finance has longstanding relationships with a range of competitive funders and can assist in providing the Recovery Loan Scheme.
Even if you’ve taken advantage of the previous Government loan schemes on offer last year to support businesses during the pandemic, such as the CBILS, BBLS or CLBILS grants, you are still able to apply for the RLS, providing you meet the required criteria.
It’s important to note however, that contrary to the previous loan schemes mentioned above, the Government will not pay the interest for the first 12 months of the RLS. Interest rates are lender dependant and subject to credit status of the applicant.
The loan can be used for any legitimate business purpose, which includes purchasing necessary equipment, assets or vehicles, hiring staff or managing cashflow.
You may also find that your lender is able to offer a better rate and more favourable terms under a different product, which they will offer you if eligible.
If you have any queries relating to the RLS or any other topics around future finance for vehicles or assets, please don’t hesitate to get in touch, CAVA Finance has and will continue to remain fully operational during the pandemic.