By Anna Jordan on Small Business – Advice and Ideas for UK Small Businesses and SMEs
A number of problems have been exposed with the government’s Covid Recovery Loan Scheme.
The Times reports that lenders are warning of weak demand for the scheme post-pandemic from small businesses. There are also issues with firms that want to access the state-backed funding.
One banker told the newspaper that the previous Covid-19 emergency funding, totalling around £74bn, had been “too generous”.
The RLS is intended to bridge the gap between the emergency Covid-19 financial support and more normal credit conditions. RLS provides credit up to £10m and comes with an 80 per cent government guarantee for lenders – less generous than the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan scheme (BBLS).
>See also: Recovery Loan Scheme up to £10m will replace CBILS and BBLS
However, there is evidence pointing to other issues with the scheme, namely too few accredited lenders and a high number of application rejections. Only 18 providers are accredited by the British Business Bank to distribute the loans.
Mr Bounce Back, a website discussing Bounce Back Loans, Recovery Loans and the Recovery Loan Scheme, has had “message after message” from firms