What is the difference between CBILS and the Recovery Loan Scheme?

19 May 2021

In the last budge announcement, Rishi Sunak (Chancellor of the Exchequer) confirmed that the Coronavirus Business Interruption Loan Scheme (CBILS) was too close. As of the 31st March 2021, businesses are not able to apply for funding under this government backed scheme.

As of 6th April 2021, the government introduced the Recovery Loan Scheme (RLS), please see the table below showing a snapshot of the main differences and similarities.

Recovery Loan Scheme CBILS
Loan amount up to £10m £50,001 – £5m
Loan term up to 6 years up to 6 years
Government pays first 12 months’ interest (BIP) No Yes
Government pays upfront lender fees No Yes
80% Government Lender Guarantee Yes Yes
Personal guarantee required Not permitted on loans up to £250,000  Not permitted on loans up to £250,000
Minimum annual turnover No minimum Over £200,000
Minimum trading history No minimum One to Two years

Features of the Recovery Loan Scheme

No minimum turnover requirement

Unlike the Coronavirus Business Interruption Loan Scheme, the Recovery loan Scheme does not require you to have a turnover of more than £200,000, meaning that it could be a good option for smaller or newer businesses that are financially viable, but did not hit the turnover threshold for the Coronavirus Business Interruption Loan Scheme.

No personal guarantee

No personal guarantee will be required if you are borrowing below £250,000, thus enabling business owners to obtain finance without the constraints of a personal guarantee.

Wider range of borrowing

Business can apply from between £25,001 up to £10m, subject to financial circumstance and qualifying criteria.

!!Important!!

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 these difficult and uncharted times.

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.

Apply for the Recovery Loan Scheme

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What is the difference between CBILS and the Recovery Loan Scheme? The Funding Store

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This article has been produced by www.TheFundingStore.co.uk for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by HPG Holdings Ltd. In all cases appropriate professional legal and financial advice should be sought before making a decision.

This article has been produced by www.TheFundingStore.co.uk for general interest. No responsibility for loss occasioned to any person acting or refraining from action as a result of the information contained in this article is accepted by HPG Holdings Ltd. In all cases appropriate professional legal and financial advice should be sought before making a decision.