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Recovery Loan Scheme


Today (6th April) sees the launch of the governments Recovery Loan Scheme (RLS) which has replaced the Bounce Back Loans and Coronavirus Business Interruption Loan Scheme. The scheme, announced at the Budget on 3 March 2021, is scheduled to run until 31 December 2021, subject to review. So what do we know so far?

Details of the Recovery Loan Scheme

The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

Term length

For term loans and asset finance facilities: from three months up to six years.
For overdrafts and invoice finance facilities: from three months up to three years.

Interest and fees

These are to be paid by the business from the outset – There is no period of deferred payment or interest being paid for the borrower. This is one of the key changes from the prior schemes – Businesses are required to meet the costs of interest payments and any fees associated.

Turnover limit

There is no turnover restriction for businesses accessing the scheme.

Personal guarantees

Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.

Access to multiple schemes

Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme, although the amount they have borrowed under an existing scheme may in certain circumstances limit the amount they may borrow under RLS.

Am I eligible for the Recovery Loan Scheme?

  • Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
  • UK-based: The borrower must be carrying out trading activity in the UK.
  • Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
  • Credit and fraud checks for all applicants: Lenders are required to undertake credit and fraud checks for all applicants, as well as customary checks such as Know Your Customer and Anti-Money Laundering. The checks and approach may vary between lenders.
  • Turnover limit: There is no turnover restriction for businesses accessing the scheme.

The following are not eligible under RLS:

    • Banks, building societies, insurers and reinsurers (excluding insurance brokers)
    • Public-sector bodies
    • State-funded primary and secondary school

What information do lenders require for the Recovery Loan Scheme?

When you apply for finance from RLS, you’ll need to provide certain evidence to show that you can afford to repay the lending, this is likely to include the following:

  • Management accounts
  • Business plan
  • Historic accounts
  • Details of assets

Decision-making on whether a business is eligible for RLS is fully delegated to the accredited RLS lenders. Individuals lenders might have additional requirements.

Accredited Lenders

18 lenders are currently accredited – it’s anticipated that more will become accredited over the coming weeks. To find out the latest list of lenders click here

More Information

We expect new lenders to be accredited over the coming weeks, improving access to the scheme. If you would like to be kept up to date with the latest news then visit our contact us page or for help applying with the scheme complete our online form