Recovery loan scheme deadline to be extended
Chancellor Rishi Sunak (pictured) will announce a six-month extension to the recovery loan scheme (RLS) in his upcoming Autumn statement, it has been reported.
According to Bloomberg, discussions are still underway, but an unnamed Treasury source confirmed that the scheme will be extended past its original deadline of 31 December 2021.
Sunak is expected to formally announce the extension on 27 October, during his budget speech.
The scheme was launched in April 2021 as a follow on to the government-backed coronavirus business interruption loan scheme and the bounce back loan scheme. It aims to provide funding of up to £10m to UK businesses as they recover from the Covid-related disruption. All loans come with an 80 per cent government guarantee, and interest rates are capped at 14.99 per cent.
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74 firms have been accredited to the scheme to date, including two peer-to-peer lenders, Assetz Capital and Funding Circle.
Many industry stakeholders have called for the RLS to be extended, or for a follow on loan scheme to be announced, as the UK economy struggles to return to pre-Covid levels.
Mike Cherry, national chairman of the Federation of Small Businesses, welcomed news of an extension, saying that it “will help firms access finance as they try and manage inflation, staff shortages, spiralling energy costs and supply problems.”
He also called for further measures, including a cut to VAT on energy bills for small businesses and an exemption for more companies from paying business rates.
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