{"value":{"id":1490896,"memberId":4134,"member":null,"memberRole":"Secretary of State for Business, Energy and Industrial Strategy","uin":"HCWS240","dateMade":"2022-07-20T00:00:00","answeringBodyId":201,"answeringBodyName":"Department for Business, Energy and Industrial Strategy","title":"Departmental Contingent Liability Notification (Second Extension of the Recovery Loan Scheme)","text":"<p>I am tabling this statement for the benefit of Honourable and Right Honourable Members to bring to their attention the details of the extension to the Recovery Loan Scheme (RLS).</p><p>RLS is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Under the extension, lenders will offer facilities of up to £2 million to support businesses that would otherwise be unable to access the finance they need, or would only be able to do so at a higher rate of interest. There will be a £6 billion cap on the aggregate value of loans provided through the scheme for the first two years.</p><p>The extension covers the period from 1 August 2022 to 30 June 2024. Under the extension, the following changes will come into force:</p><ul><li>The maximum amount of external finance available will be £2 million per business in Great Britain; for businesses in scope of the Northern Ireland Protocol, the maximum amount will be £1 million per business.</li><li>The requirement for businesses to certify that they have been affected by the Covid-19 pandemic will no longer apply. To lend through the scheme, lenders will be required to certify that they would not have been able to offer a facility to the business on their normal commercial terms, or that they would have only been able to do so at a higher interest rate.</li><li>Personal guarantees will be permitted, but not required, for facilities under £250,000 (as has been the case to date for facilities above £250,000). This brings the scheme in line with standard commercial practice in business lending. Principal private residences may not be used as security under any circumstances.</li></ul><p>Otherwise, scheme parameters are unchanged. As previously:</p><ul><li>The minimum facility size will be £25,001 for loans and overdrafts and £1,000 for asset and invoice finance.</li><li>Businesses will be required to meet the costs of interest payments and any fees from the outset.</li><li>Businesses who have made use of the previous Coronavirus loan schemes will be able to access the scheme.</li></ul><p>Given the above, the maximum contingent liability for lending up to the £6 billion cap on the scheme is £4.2 billion.</p><p>I will be laying a Departmental Minute today containing a description of the liability undertaken.</p>","house":"Commons","noticeNumber":2,"hasAttachments":false,"hasLinkedStatements":true,"linkedStatements":[{"linkedStatementId":1490909,"linkType":"JointStatement","linkDate":"2022-07-20T00:00:00"}],"attachments":[]},"links":[{"rel":"self","href":"/Statements/1490896","method":"GET"}]}