Rishi Sunak has released details on his latest support measure as the Recovery Loan Scheme was officially launched today. Through this scheme, loans will be issued to protect businesses and jobs into 2021, with the loans in question including 80 percent Government guarantees and an interest rate cap.
From today businesses, which the Government stresses can range from coffee shops to hairdressers, can access loans varying in size from £25,000 to £10million.
Additionally, invoice and asset finance are available from £1,000.
Rishi Sunak welcomed the new scheme with the following comments: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and as the situation has evolved we have ensured that our support continues to meet businesses needs.
“As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.”
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The Government noted the “vast majority” of cases are expected to be much lower than this and Ministers are urging lenders to ensure they keep rates down to help protect jobs.
The Recovery Loan Scheme can be used in addition to existing state support such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme.
Kwasi Kwarteng, the Business Secretary, also commented on the scheme’s launch: “We’re doing everything we can to back businesses as we carefully reopen our economy and recover our way of life.
“The launch of our new Recovery Loan Scheme will provide businesses with a firm foundation on which to plan ahead, protect jobs and prepare for a safe reopening as we build back better from the pandemic.”
The scheme was welcomed by a number of business groups with Rain Newton-Smith, CBI’s Chief Economist, commenting: “The coronavirus loan schemes have provided a critical lifeline to businesses, and so its successor – the new Recovery Loan scheme – comes as a huge relief to firms.
“These loans can be taken alongside existing COVID loans to help firms refinance, restructure and go for growth.
“It’s vital support remains as restrictions relax and demand returns to normal, allowing businesses to recover, save jobs, and support for reopening.”
David Postings, the Chief Executive of UK Finance, also had the following to say: “The banking and finance industry remains committed to supporting businesses of all sizes through the next phase of the pandemic response. As focus turns to economic recovery, we know that many firms are still facing uncertainty. The new Recovery Loan Scheme, alongside other commercial financial support, will help firms rebuild and invest for future growth.”