Phase 2 of the Government's Recovery Loan Scheme launched on 1st September.

The RLS is designed to help businesses get back on their feet following the impact of the Covid-19 pandemic. Businesses across many sectors were unable to operate, had a significant reduction in their ability to serve customers or suffered a huge downturn in demand. As a result, many owners drew down their savings in order to keep the business afloat and now do not have the capital to grow their business again, capturing opportunities and the demand that now exists.

The Government scheme allows lenders to loan money with a 70% guarantee on the funds borrowed. This means that an RLS loan carries a lot less risk for the lender than a traditional loan. If a business defaults, the Government guarantees that the lender will receive 70% of any outstanding finance. As a result, lenders are willing to lend money to businesses that would previously have found it difficult to obtain finance and lenders can offer a more competitive rate than they may have previously.

In the construction industry we had to try and complete projects with huge disruption to ways of working and subsequently deal with both labour and materials shortages as well as material price rises. This has reduced available cash and stopped many buying new equipment, adapting to changing construction methods, adopting new technologies and prevented them from being able to win some new contracts. The Recovery Loan Scheme is designed to offer finance to those companies who now want to catch up, to grow their business again and adapt to the changing economy.

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So, what is a Recovery Loan?

• Borrow from £10,000 to £2,000,000

• Your Principal Private Residence cannot be used as security

• Available to businesses trading in the UK with a turnover up to £45m

• Funds can be used for any legitimate business use – buy whatever your business needs

• Competitive fixed interest rates – useful in times of increasing rates

• No Covid-impact assessment required

• Repayment terms of up to 6 years – allows an affordable monthly payment

• Previous applicants for CBILS, BBL and RLS can still apply

• Government guarantees 70% of the loan to the lender

Should I take finance?

Sometimes firms are sceptical of taking finance, but using business finance has many advantages and is not something that should be seen negatively, as long as the repayments are affordable.

Finance allows a business to:

• Get what they need straight away, capturing immediate opportunities

• Pay today's prices and not get caught out by rising inflation

• Spread the cost with affordable monthly payments rather than tying up free cash in assets

• Make repayments whilst the new equipment generates revenue

• Keep credit cards and overdrafts for emergencies rather than cutting off the last line of finance

• Take potential tax advantages when buying new assets

Portman is both a lender and a broker with a supporting panel of 45 specialist lenders. We use our panel to compare the market for you and find the loan that best suits your circumstances. We consider all credit histories and can make decisions in as little as 24 hours.

Rated Excellent on Trustpilot, contact Portman on 01604 669357

Or visit us online at www.portmanassetfinance.co.uk