The Recovery Loan Scheme (RLS) was launched on 6th April 2021, and came in to replace the CBILS and BBLS Schemes.
Providing up to £10m in finance for businesses looking to recover after Covid and can be used for any legitimate business purpose including managing cashflow, investment and growth.
The new RLS allows businesses of all sizes to apply whereas the previous schemes, CBILS and BBLS, were only available for Small to Medium Businesses.
About the Scheme:
Businesses will be able to apply for a loan between £25,000 and £10m per facility (maximum £30m per group) until the 30th June 2022. Also available for businesses is asset finance and invoice finance between £1,000 and £10m. Which the Government will provide a guarantee to the lender of 80%.
The length of the term for the loans and asset finance facilities are up to six years. For invoice finance and overdrafts, terms will be up to three years.
The great news is that businesses who have already taken out CBILS and BBLS will still be able to access this scheme. One thing to note is that the amount you will be able to borrow will depend on the lenders assessment of your business.
The key points of the new Recovery Loans:
🔸️ Loans £25,001 - £10m
🔸️ Asset & Invoice Finance starting at £1000
🔸️ Any size business can apply
🔸️ Across a range of financial products (Loans, Asset, Invoice Finance, Overdrafts)
🔸️ 80% Government Guarantee
🔸️ Use for any legitimate business purpose
🔸️ Available via accredited lenders only
What you need to know:
As the borrower, you remain 100% liable for the debt.
You might be asked by the lender for Personal Guarantees if the amount being borrowed is above £250,000. This decision is down to each individual lender.
Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility. The annual effective rate of interest, upfront fee and other fees cannot be more than 14.99%.
If one lender turns you down, you can still approach other lenders within the scheme.
If any businesses are unsure about RLS and what they can get, speak to your trusted advisor. They will be able to advise on what is available and which lenders will be able to help you. As always we are only a phone call or email away if you want to talk through your thoughts.
British Business Bank: https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/
Gov: https://www.gov.uk/government/news/recovery-loan-scheme-launches-today#UKGov