Businesses can still access the Recovery Loan Scheme

Businesses affected by Coronavirus can still access the Recovery Loan Scheme (RLS) launched in April, despite the closure of applications for other Government loan schemes, including the Coronavirus Business Interruption Loan Scheme (CBILS).

The RLS opened for application on 6 April 2021, following the closure of several other Government loan schemes on 31 March 2021.

Finance worth up to £10 million, backed by a Government guarantee is available in the form of:

  • Term loans
  • Overdrafts
  • Invoice finance
  • Asset finance

Personal guarantees are not required for loans of less than £250,000 but can be for loans above this level at the lender’s discretion, although not over Principal Private Residences.

Crucially, businesses that have already accessed CBILS, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) or the Bounce Back Loan Scheme (BBLS) can still access the RLS, although amounts borrowed under previous schemes could affect the amount they can borrow under the new scheme.

The RLS will close on 31 December 2021.

Fifth round of the Self-Employment Income Support Scheme to launch in late July

The fifth round of the Government’s Self-Employment Income Support Scheme (SEISS) will launch in late July, HM Revenue & Customs (HMRC) has confirmed.

This round of the SEISS will differ from previous rounds as it will be paid at two different rates, which depend on the reduction in turnover a self-employed individual experienced in the year from April 2020 to April 2021.

Those whose turnover fell by 30 per cent or more will once again be able to claim a grant worth 80 per cent of three months’ average trading profits, capped at £7,500 in total.

Meanwhile, those whose turnover fell by less than 30 per cent will be able to claim a grant with 30 per cent of three months’ average trading profits, capped at £2,850 in total.

HMRC has not yet provided details of how it will assess reductions in profitability in 2020-21, given Self-Assessment tax returns for the year are not due until 31 January 2022. However, detailed guidance is expected by the end of June.

To be eligible for the grant an individual’s trading profits in 2019-20 must have been no more than £50,000 and must have been at least equal to income from other sources.

Self-employed individuals must also confirm that they:

  • Intended to continue to trade;
  • Reasonably believe there has been a significant reduction in their trading profits due to reduced business activity, capacity, demand or inability to trade due to Coronavirus from May 2021 to September 2021.

They will also need to keep records of evidence that supports their declaration.