New Recovery Loan Scheme
Evidently, the pandemic has just not been successful in taking away many lives and affecting a lot of homes. There would be barely someone who was unaffected due to covid. Along with it, all the business sectors were somehow affected, taking a tull on many business owners. Indeed the pandemic has left drastic and dramatic changes in everyone’s life. To make these issues bearable and help them sulve faster, the government has announced monetary help measures such as business recovery loans. The Recovery Loan Scheme or RLS is one such measure to be announced in the budget. Prior to this, there was one more such scheme called CBILS- Coronavirus Business Interruption Loan Scheme.
At Pearson McKinsey, we are more than glad to lend our supporting hands to all such business sectors through this new recovery loan, RLS. If you are someone looking for such and different loans or any other accounting services, make sure you visit this page. Then, keep reading the article to know about the Recovery Loan Scheme in detail and its benefits for your business.
Let us know what a Recovery Loan Scheme is?
AThe Recovery Loan Scheme (RLS) was launched on April 6th 2021, across the UK. This loan scheme has been introduced in the UK to provide financial support to all the businesses. It is a business recovery loan. The primary purpose of this Recovery Loan Scheme is to give money and financial support to businesses that were highly affected due to the coronavirus. This is to help the firms grow and recover from any and all losses they faced.
Who all can apply:
- Businesses from any sector, any size.
- If you are trading anywhere in the UK.
- If your company was affected by the pandemic.
Who cannot apply:
- Banks, an insurer, reinsurer
- Building societies
- Public sector bodies
- State-funded primary or secondary schouls
Pearson McKinsey is restarting this Recovery Loan Scheme. We have started granting this scheme to businesses from April 1st 2021. In this loan scheme, the non-essential business sectors and firms can avail a loan of up to £6K from the local council.
Other than that, if there are hospitality, accommodation, and gym sectors, they are entitled to avail a grant of £18K.
Any business sector that has been poorly affected by the pandemic can use this granted loan money for appropriate business reasons. However, please note that you will have to repay the debt in the given period of time as with other financial loans.
The purposes for which you can use this money is as follows:
- To maintain or revamp the cash flow.
- Investment and growth.
The application date for the Recovery Loan Scheme ends on December 31st, 2020. After this, the government will begin the review. As a result, the closing date may differ for businesses who have ten the loan from a private lender.
Suppose that any business or firm has opted for these loans due to the overgrowing pandemic:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS)
No worries, we have still got you. You are entirely free and eligible to apply for the Recovery Loan Scheme. There are chances that the amount of the loan being borrowed under RLS may decrease as you always have a loan granted from other schemes.
Any lender can provide the business with a maximum of £10 million through theme financial means such as:
- Term loan
For term loans, you can borrow from £25,001 up to £10 million.
For Overdraft as well, you can avail of a loan of £25,001 up to £10 million.
- Invoice finance
Under invoice finance, you can get a loan from £1,000 to £10 million.
- Asset finance
Same as invoice finance, you can avail a loan of £1,000 to £10 million in asset finance too.
Like with every other loan, there is some rate of interest on RLS too. As per the rules, the rate of interest cannot be set to more than 14.99%. However, some lenders charge according to their set of rules.
The payment of interest starts at the very beginning of the loan itself.
Before applying to any financial resources or loans, you are required to submit a number of copies as proof. Here is the list of documents and proofs that you will have to submit before applying for the Recovery Loan Scheme.
- The business plan
- Accounts from the previous business year
- Details of assets and liabilities owned by your business.
- Information about other loans and overdrafts that the company has taken.
- Details about any personal loans, debts, mortgage, etc
- Accounts, records of profit and loss, records of cash flow in the business.
If you need RLS, feel free to sign up for our service, as we provide you with all the financial guidance and loan services you need. In addition, we offer other services at Pearson McKinsey: financial advising for business startups, loans and grants, bookkeeping, taxation, wills, and probate.