The government will extend a scheme offering government-backed loans to small businesses by a further two years, Business Secretary Kwasi Kwarteng said on Wednesday.
“The extension of the Recovery Loan Scheme will help ensure we continue to provide much-needed finance to thousands of small businesses across the country, while stimulating local communities, creating jobs and driving economic growth in the UK,” Kwarteng said.
The Recovery Loan Scheme was initially launched in April 2021 to help businesses recovering from the Covid-19 pandemic. The scheme is open to businesses of any size to support them to access loans and other kinds of finance so they can recover after the pandemic and transition period.
Up to £10 million is available per business through a network of accredited lenders, listed on the British Business Bank’s website.
The bank today (July 20) revealed that accredited lenders have offered over £4.5 billion to small businesses through the Recovery Loan Scheme.
Of the £4.51bn of total funding offered through 20,643 facilities, £3.83bn has been drawn down through 18,338 facilities.
The scheme was originally scheduled to run until 31 December 2021, but the government extended it to 30 June 2022, making some adjustments to its terms. The government provided a guarantee of 80 per cent for loans made before 1 January 2022 and 70 per cent for loans after that date. The borrower remains 100 per cent liable for the debt.
The bank said the successor scheme announced today by the government will open for applications in August, adding that further details will follow when the scheme goes live.