Recovery Loan Scheme Guide

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  • About the scheme
  • Key features of the scheme
  • Eligibility criteria include

A new iteration of the Recovery Loan Scheme (RLS) aims to make it easier for UK businesses to raise capital if they want to invest and grow.

This will support non-Northern Ireland Protocol borrowers with facility sizes up to £2m. Borrowers under the Northern Ireland Protocol can borrow up to £1m, provided they are not operating in sectors with reduced aid limits. These include agriculture, fishing/aquaculture and road transport.

Companies can use the budget for valid enterprise functions which include dealing with coins flow, investments and growth.

About Recovery Loan Scheme

The new Recovery Loan Scheme (RLS) aims to provide access to finance for UK companies wanting to commit and grow. We support loan sizes up to £2m for non-Northern Protocol borrowers. Northern Ireland borrowers can borrow up to £1m, as long as they do not operate in sectors with fewer aid restrictions. In this case, the minimum amount of credit available is restricted. Examples include agriculture, fishing/aquaculture, and road transportation. Companies can use the funds for legitimate business purposes such as cash flow management, financing and growth. But for these reasons, companies need to be able to take on additional debt.

Key features of the scheme:

The Recovery Loan Program aims to improve the conditions on which borrowers can borrow. If lenders can offer commercial loans on better terms, they will.

Key features include:

  • The maximum number of facilities offered under the scheme is £2m per corporate group for non-Northern Ireland Protocol borrowers and up to £1m per corporate group for Northern Ireland Protocol borrowers. Facility minimum sizes range from her £1,000 for facility and invoice finance to her £25,001 for term overdrafts and loans.
  • Broad range of products: RLS offers term loans, overdrafts, asset finance and invoice finance. Not all lenders can offer all products.
  • Term: 3 months to 3 years for bank overdrafts and invoice finance, 3 months to 6 years for term loans and wealth management facilities.
  • Access to multiple programs: Businesses registered with CBILS, CLBILS, BBLS, or RLS facilities prior to June 30, 2022 will not be prevented from applying for RLS after August 1, 2022. However, loans using these strategies can reduce the maximum amount. In some cases, you are eligible.
  • Pricing: Annual effective interest rate plus upfront or other fees will not exceed 14.99%.
  • Personal Guarantees: Personal guarantees are available at the lender’s discretion in accordance with standard commercial lending practices. Privately owned principal property is not accepted as collateral under the program.
  • The guarantee is passed on to the lender. Once the lender completes the regular collection process, the system provides his 70% government guarantee on the outstanding balance of the facility. The borrower remains fully responsible for its debts at all times.
  • Lender Delegated Decision Making: Facilities backed by the Collectible Loan Program are provided at the discretion of the borrower. Lenders are required to conduct standard credit and fraud checks on all applicants.

RLS support, like many government-sponsored business support functions, is considered a subsidy and a benefit to borrowers. There is a limit to the amount of support borrowers and their large groups can receive over her three years. Early tax incentives may reduce a company’s ability to borrow.

Eligibility Criteria Include:

Sales Limit: The program is available to small businesses with a sales limit of £45m.

● UK Residents:
Borrowers must have business in the UK and at least 50% of their income from business with most businesses.

No Covid-19 Impact Test Required: Unlike previous versions of the program, most borrowers do not need to confirm that they are affected by Covid-19.

Feasibility Test: The lender considers the borrower’s business proposition to be viable, but due to uncertainties and the impact of his Covid-19, issues related to the borrower’s short to medium-term at its discretion) may be ignored.

● Defaulting Entity:
The borrower must not be a defaulting entity and must not be involved in any related bankruptcy proceedings.

● Grant Limit: The borrower must certify in writing that receipt of the RLS facility will not result in the company receiving more than the maximum allowable grant amount. All borrowers receiving grants from government-funded programs are required to submit a written statement proving the amount and type of assistance received.

Northern Ireland borrowers can borrow up to £1m, as long as they are not operating in a sector with fewer state aid restrictions. In this case, minimum borrowing amounts apply. Examples include agriculture, fishing/aquaculture, and road transportation. Northern Ireland Protocol: All borrowers must answer a few questions to determine if they are covered by the Northern Ireland Protocol. The Northern Ireland Protocol sets a cap on applicable subsidies and therefore sets a maximum amount that can be borrowed under the RLS. Charities and universities must prove their impact of Covid-19.

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