The British Business Bank has posted new data for the third iteration of its Recovery Loan Scheme, which allows smaller firms to raise up to £2 million.
Businesses can use the loans for any purpose, including cashflow management, investment, and growth. The terms of the loans range from three months to six years. The scheme provides a 70% government-backed guarantee against the outstanding balance of the loan after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
According to the Bank, the total offered lending for this iteration of the scheme is close to £1.4 billion, with more than 6,000 smaller businesses drawing more than £1.15 billion of finance so far.
The Bank shares:
- More than 90% of the guaranteed facilities supported businesses with fewer than 50 employees.
- Of that 90%, more than 65% of facilities were provided to businesses with fewer than 10 employees.
- More than 87% of the guaranteed facilities have gone to businesses with less than £5m turnover.
- More than 50% of drawn lending has been designated for business investment and growth purposes, and a third for working capital.
Reinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank, said the loans provide intervention at a critical time for UK smaller businesses.
The first two phases of the plan was designed to support access to finance and growth for UK businesses as they recovered from the Covid-19 pandemic.
The Chancellor of the Exchequer announced in the Spring Budget 2024 that the scheme, which was due to end on 30 June 2024, would be extended for two years until 31 March 2026.