The 2021 Budget announced a host of new government initiatives to benefit your business this year. These include the Recovery Loan Scheme (RLS) and the Super-Deduction tax relief. Another initiative is the Kickstart Scheme which started last September.
Asset Funder is here to help you understand and access these initiatives to help you recover and grow your business.
What is the Recovery Loan Scheme?
The Recovery Loan Scheme was launched on 6th April 2021 and helps businesses access loans and other kinds of finance so they can recover after the pandemic and transition period. Applications for the loan are open until 31st December 2021, subject to review.
A recovery loan could help you in ways such as accessing cash flow, purchasing new equipment, invest in marketing and ultimately grow your business.
Each business can borrow:
- Between £1,000 and £10 million for invoice or asset finance
- Between £25,001 and £10 million for term loans and overdrafts
There will be no personal guarantees needed on loans of up to £250,000, however if you are borrowing over this amount, it will be up to the discretion of the lender whether they will require a personal guarantee.
Who is eligible?
The RLS is available for businesses who have been negatively impacted by the pandemic and you will need to show proof of this. You will also need to show that your business is not in collective insolvency proceedings.
RLS is still open to those who have accessed other coronavirus loan schemes including the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS), and the Coronavirus Large Business Interruption Loan Scheme (CLBILS). Please note that previously borrowing under these loans may affect how much you can borrow under RLS. If you were not eligible for CBILS, you still may be eligible for the RLS.
How Asset Funder can help
As an ISP member we have already worked with many of you in the last 12 months to access CBILS and we are pleased to announce that we are now an accredited Finance Broker for the Recovery Loan Scheme (RLS). The good news is that the number of lenders able to offer RLS finance has also increased significantly over the last 2 weeks, however some will not be able to offer all the finance listed.
We work with an extensive list of finance lenders allowing us to find and offer the best finance products tailored for your business. Our experienced team will work with you to make the process simple with a quick turnaround.
What is super-deduction?
Super-deduction is a generous tax relief for business investing in new plant and machinery equipment. By creating a stronger incentive for investments, the scheme promotes economic growth and an increase in productivity.
Under super-deduction, companies can claim 130% capital allowance on qualifying investments. You may also benefit from a 50% first-year allowance for special rate assets. For every pound a company invests, their taxes are cut by up to 25p.
Who is eligible?
Super-deduction tax relief will only be available to limited companies trading in the UK, not sole traders or partnerships. This is because it offers tax relief against corporation tax.
Unincorporated businesses, however, can still benefit from the Annual Investment Allowance (AIA) which is currently £1 million until the end of 2021.
The tax relief only applies to ‘qualifying’ plant and machinery equipment. Please note that this must be new, not second-hand. It must also be purchased between 1st April 2021 and 31st March 2023 to qualify, so if you are looking to invest in new equipment then now may be the perfect time.
This is not an exhaustive list; however HM Treasury has suggested the following types of equipment:
- Tractors, lorries, vans
- Ladders, drills, cranes
- Foundry equipment
- Office chairs and desks
- Solar panels
- Computer equipment and servers
- Electric vehicle charge points
- Refrigeration units
Super-deduction is also not available on motor cars. Certain assets such as building fixtures will only qualify for 50% relief in the first year.
If you are looking to make the most of this opportunity and would like to discuss your options, please give us a call on 0800 999 6962 or e-mail us at firstname.lastname@example.org and a member of our team can go into greater detail.
What is the Kickstart Scheme?
The Kickstart Scheme provides fully funded work placements for 16- to 24-year-olds who are claiming universal credit. It’s a win-win situation for both employers looking to grow their business & young people looking to get into work.
At Asset Funder, we have recently hired a Digital Marketing Executive through the Kickstart Scheme. You can create Kickstart placements for any type of role, including administrators, sales assistants and labourers.
This scheme covers:
- 100% of the National Minimum Wage for 25 hours a week for a 6-month placement.
- The associated National Insurance and employer minimum automatic enrolment contributions.
- An additional grant of £1,500 to help with training and equipment.
We’d be happy to share our experience of the process if you’re interested in hiring a Kickstarter through this scheme too, just send us an e-mail at email@example.com.
How Asset Funder can help your business
Since the pandemic began, we have been able to help many companies access the previous coronavirus recovery schemes such as CBILS, CLBILS and BBLs. Although these loans are no longer available, the RLS is a great alternative to help your business recover and grow. Super-deduction makes investments in new equipment highly attractive, and the Kickstart Scheme allows you to hire temporary employees paid for fully by the government.
If you are looking to access the new government initiatives, then Asset Funder is here to help. Using a finance brokerage can have great benefits when accessing funding due to our expertise. For example, although you may be eligible for the RLS, you may also be eligible for commercial loans which may have better terms.
We can help you access many different types of funding, such as hire purchase, leasing and invoice finance. These may be more suitable for you than the RLS. We would be happy to discuss your options with you so that you can make the best decision for your company.