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The Recovery Loan Scheme: Ongoing support for SMEs

But is it the right thing for your business?


Posted by Roger Eddowes on 17/05/2021 @ 8:00AM

The latest Government aid package arrived in April, as SME's need to deal with bad debtors and late payers because of the pandemic, meaning they have to deal with poor cash flow themselves ...

Think carefully before applying for the Recovery Loan Scheme!

Think carefully before applying for the Recovery Loan Scheme!

copyright: goodluz / 123rf

The Recovery Loan Scheme (RLS) is a new Government programme allowing financial support of businesses affected by COVID-19. This supersedes any plans previously announced. The RLS ensures businesses still benefit from Government guaranteed financing through 2021, albeit at a lower amount than its predecessor schemes.

"The Government has supported UK businesses with £350 billion of grants and loans since the beginning of the pandemic!"

This is a very flexible scheme, and it will help many businesses as the pandemic burns out and the economy starts to recover; however, the downside of the scheme is that SME's already in trouble will sign-up to it and cause later repayments of the loan themselves.

I'd recommend speaking to your accountant before joining the Recovery Loan Scheme. The focus should be on reducing outgoings, expanding sales and improving overall cashflow in these difficult times and adding more debt on top of existing loans you took out during the pandemic could be the wrong thing to do.

The vaccine rollout has been a stonking success, so now is certainly the time to start thinking about the future rather than just being in survival mode. But there are other tools available to SMEs to help with cashflow rather than just taking on more debt.

Think carefully before applying for the Recovery Loan Scheme.

Until next time ...

Business Godparent


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About Roger Eddowes ...


Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.