The Treasury has extended the recovery loan scheme (RLS) for six months but with a reduced maximum amount available to businesses and lower government guarantee.
Chancellor Rishi Sunak’s (pictured) Autumn Budget has revealed the scheme will be extended until 30 June, but the finance available to businesses will drop from up to a maximum of £10m per company to a maximum of £2m, and the government guarantee will be reduced from 80 per cent to 70 per cent.
The RLS was launched on 6 April as a follow-on scheme to the government-backed coronavirus business interruption loan scheme and was originally intended to run until the end of the year, subject to a review.
“The recovery loan scheme will also be extended until 30 June 2022 to ensure that lenders continue to have the confidence to lend to small and medium-sized businesses,” the Autumn Budget document said.
“Finance will be available up to a maximum of £2m per business, supporting their recovery and growth following the pandemic.
“The government guarantee will be reduced from 80 per cent to 70 per cent to encourage the lending market to move towards normality as the economy continues to recover.”
Earlier this week, the British Business Bank announced that £1.06bn has been offered via 6,190 facilities to businesses across the UK. A total of £822.8m has been drawn down through 5,137 facilities to date.