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The Recovery Loan Scheme (RLS) aims to improve the terms on offer to borrowers. If a lender can offer a commercial loan on better terms, they will do so. Ask us about what loans are available for your requirements.
Key features of RLS Loans include:
- Up to £2 million per business group: The maximum amount of a facility provided under the scheme is £2 million per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million per business group for Northern Ireland Protocol borrowers2. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts;
- Wide range of products: RLS supports term loans, overdrafts, asset finance and invoice finance facilities. Not all lenders will be able to offer all products;
- Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years;
- Access to multiple schemes: Businesses that took out a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) or RLS facility before 30 June 2022 are not prevented from accessing RLS, but in some instances borrowing under these schemes may reduce the maximum amount the borrower is eligible for;
- Pricing: Interest rates and fees charged by lenders will vary and will depend on the specific lending proposal. The lender’s pricing will take into account the benefit of the Government guarantee;
- Personal Guarantees: Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the Scheme;
- Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt;
- Decision-making delegated to the lender: RLS-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.
The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. More information on subsidies is available here.
Eligibility criteria include:
- Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group);
- UK-based: The borrower must be carrying out trading activity in the UK and, for most businesses3, generating more than 50% of its income from trading activity;
- Viability test: The lender must consider that the borrower has a viable business proposition but may disregard (at its discretion) any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19;
- Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings;
- Subsidy limits: Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive. All borrowers in receipt of a subsidy from a publicly funded programme should be provided with a written statement, confirming the level and type of aid received.