RECOVERY LOAN SCHEME

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Recovery Loan Scheme

The Recovery Loan Scheme is now available through accredited lenders.

Launched on 6th April, the Recovery Loan Scheme (RLS) runs until 31st December 2021, and provides financial support to businesses across the UK following the coronavirus pandemic.

As a result, you can now apply for the Recovery Loan Scheme (RLS) if your business has been affected by the coronavirus pandemic.

If eligible, the funding that you receive can be used for cashflow, investment and growth.

Similar to CBILS, each accredited lender, offering finance through the Recovery Loan Scheme (RLS), will have their own eligibility criteria.

This is to make sure that your business can afford to take out additional debt finance for these purposes.

Even if you have taken funding through either:

  • the Bounce Back Loan Scheme (BBLS)

  • the Coronavirus Business Interruption Loan Scheme (CBILS)

  • the Coronavirus Large Business Interruption Loan Scheme (CLBILS)

… the Recovery Loan Scheme (RLS) is still open to you. Though as already mentioned, your business will need to be able to afford to take out additional debt finance.

Key Features of the Recovery Loan Scheme (RLS)

  • Up to £10m facility per business.

  • Government guarantee to the lender to encourage lending.

  • Interest and fees to be paid by the business from the outset.

  • Terms from 3 months up to 6 years.

  • No Personal Guarantees for amount up to £250,000, capped at 20% of the remaining balance over £250,000.

  • No turnover limit or restriction for the Recovery Loan Scheme (RLS).

  • 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.

Types of finance available under the Recovery Loan Scheme (RLS)

  • Term loan

  • Asset finance

  • Invoice finance

  • Overdraft

Eligibility for the Recovery Loan Scheme (RLS)

You will be able to apply for a loan if your business:

  • is carrying out trading activity in the UK

  • has been impacted by Covid-19 – you will need to confirm to the lender that you have been impacted by the coronavirus pandemic

  • has a viable business proposition – your lender may disregard (at its discretion) any concerns over short-term to medium-term business performance due to the uncertainty and impact of Covid-19.

Business that have received support under the existing COVID-19 guaranteed loan schemes will still be eligible to access finance under this scheme, if they meet all other eligibility criteria.

Who can apply for the Recovery Loan Scheme (RLS)

Businesses from any sector will be eligible to apply, except:

  • banks, building societies, insurers and reinsurers (excluding insurance brokers)

  • public-sector bodies

  • state-funded primary and secondary schools

How to apply for the Recovery Loan Scheme (RLS)

To apply for the Recovery Loan Scheme (RLS), you will need to provide supporting evidence that you can afford to repay the Recovery Loan Scheme (RLS) facility, including, but not limited to:

  • Historic filed accounts

  • Management accounts

  • Details of assets

Credit and fraud checks

Accredited lenders will be required to undertake 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 performance owing to the pandemic. Checks and approach may vary between lenders.

Please note that your business will be liable for 100% of the debt. When taking out funding through the Recovery Loan Scheme (RLS), the business is liable for the full loan amount.

If the business is unable to repay, the scheme provides a partial guarantee to the lender, not to the business.

The Funding Store have a panel of Recovery Loan Scheme (RLS) accredited lenders that can assist with your search for the right business finance in this difficult and uncharted time.

Once you have decided what best suits your business needs then why not contact us on 01908 880420 or request a call back at a more convenient time.

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