COVID-hit businesses seeking to invest and grow are being encouraged to consider applying for a government-backed loan scheme as the deadline approaches.

The Recovery Loan Scheme (RLS) offers loans of up to £2million, of which 70 per cent is underwritten by a government guarantee.

It is available to businesses that have been affected by Covid and whose turnover is less than £45m and businesses.

The money may be used for any legitimate purpose, including cashflow, investment and growth, but the business are liable for the entire debt and must be able to repay it.

More than £1billion has been offered to small and medium sized enterprises under the scheme.

The deadline for applications is June 30.

Mark Barrie, funding and strategic partnership director for accountancy and business advisory firm Azets, said: “It can take lenders a few weeks to process an RLS application so anyone considering this option should act now. The RLS offers a very attractive and accessible funding solution to SMEs trying to secure finance.

“The scheme officially closes on June 30 and an application must be assessed and decision made by this date. This means applications must be in well in advance of June 30 to give the lender time to fully review the application.”

Azets, the UK’s largest regional accountancy firm and business adviser to SMEs, has its Hampshire office in Chandlers Ford.

Mr Barrie also highlighted the Super Capital Allowances scheme, which allows 130 per cent capital allowances on qualifying plant and machinery expenditure until March 31, 2023.

“SMEs could secure an RLS loan, invest in the business and further benefit from generous capital allowances of 130 per cent,” he said.

“It is a great opportunity to borrow, invest and save and it is unlikely that we will see such an attractive incentive again.

“Covid loans and support measures will soon be over, and whilst there is a rigorous assessment applicable to the RLS, it is one of the most attractive funding options currently available.”