Recovery Loan Scheme (RLS)

Recovery Loan Scheme (RLS)

Scott Monks

The Government’s Recovery Loan Scheme can provide your business with essential finance if you’re struggling to recover or grow after the challenges of the Covid-19 pandemic. 

RLS aims to help small and medium-sized businesses across the UK affected by Covid-19, providing support for businesses to recover and grow following the disruption of the pandemic. It is designed to appeal to businesses that can afford to take out additional debt finance and can be used for any legitimate business purpose, including managing cashflow, investment and growth.

If you have previously taken out Government-backed financial assistance through CBILS, CLBILS, or BBLS facilities, you are still eligible to apply for finance under the RLS, provided you meet all other eligibility criteria. The Scheme will be available until 30 June 2022, subject to review by the British Business Bank.

What are the key features of RLS?

RLS guarantees a wide range of products, covering term loans, overdrafts, asset finance and invoice finance facilities. Businesses can borrow up to a maximum of £2 million, available on repayment terms up to six years (for term loans and asset finance) and up to three years (for overdrafts and invoice finance facilities). 

Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

Businesses will be required to meet the costs of interest payments and any fees associated with the facility from the outset.

Lenders will be required to undertake their standard credit, fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks for all applicants. When making their assessment, lenders may overlook concerns over short-to-medium term business performance owing to the pandemic. The checks and approach may vary between lenders.

The scheme provides the lender with a government-backed 70% guarantee against the outstanding balance of the facility. The business remains 100% liable for repayment of the facility.

What can the Recovery Loan Scheme offer my business?

  • Businesses are eligible if they were viable/trading well pre-Covid
  • Have been impacted by Covid (however minor that may be)
  • No PG’s up to £250k (above is at lender discretion)
  • Government guarantee up to 70% (business remains 100% liable for the debt)
  • Sector agnostic
  • Rates capped
  • Term up to 6 years
  • Scheme EXPIRES 30/06/2022 

To apply for an RLS loan, please get in touch. Working with one of our independent finance brokers, you will be able to access independent advice, as well as receiving assistance with your application at every step.