Lloyds Banking Group PLC (LSE:LLOY) and NatWest Group PLC (LSE:NWG) are among the first banks to be approved under the newly extended recovery loan scheme.
Launched in April 2021 to help businesses recover from the Covid-19 pandemic, the original scheme was closed for applications in June this year after providing over £4.5bn of finance to SMEs to around 19,000 businesses.
The new iteration of the scheme, lasting until June 2024, is designed to help businesses with turnover under £45mln access finance for investment, recovery, growth and managing cashflow.
Five UK lenders have been accredited by the British Business Bank under the new scheme: Lloyds, NatWest, Coventry & Warwickshire Reinvestment Trust (CWRT), Bank of Scotland (which is part of Lloyds) and Royal Bank of Scotland (part of NatWest).
The lenders will be able to offer facilities of up to £2mln for small businesses outside the scope of the Northern Ireland Protocol, and up to £1mln for those within.
With the government offering a guarantee of 70 % to the lender, the scheme aims to improve the terms on offer to borrowers.
The Business Bank said it continues to review applications from a range of lenders, from banks to platform lenders, debt funds, invoice finance lenders, asset finance lenders and responsible finance lenders.
Businesses can use recovery loans for any legitimate business purpose but must be able to afford to take out additional debt finance for these purposes.