The Recovery Loan Scheme is running until 30th June 2022. You might be thinking why is this important or could this be relevant to my business?
Well, the government continues to support SMEs as they rebuild out of the pandemic. At present, should your business be approved for a Recovery Loan, lenders will not require Directors to sign a personal guarantee up to £250,000 and your interest rate will typically be lower than pre-pandemic levels. Importantly, interest rates would appear to be on the rise and under the scheme you have relative certainty on the cost of borrowing, as the scheme has a ceiling rate of 14.9% where lenders will typically offer a competitive rate below this.
If your business has plans to grow in the next 6-12 months, the Recovery Loan Scheme could be worth exploring. For context, the government have been backing the funding market to allow lenders to lend in uncertain times. This support will most likely come to an end in July, this could result in lenders being more cautious and asking for more security in the form or personal guarantees and debentures.
For further information, contact the HGH team: