The Recovery Loan Scheme (RLS) is available for businesses through a number of British Business Bank accredited lenders across the UK.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to you but if a lender can offer you the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.
How to apply
Find a lender
Approach a lender
You should approach a lender yourself, ideally via its website.
Not every accredited lender can provide every type of finance available under RLS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.
The lender makes a decision
Please note that Recovery Loan Scheme-backed facilities are provided at the discretion of the lender.
Under the scheme, lenders won’t take any form of personal guarantee for facilities of £250,000 or less.
If you’re borrowing more than £250,000, the lender has the discretion to decide whether to take personal guarantees. However:
- the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied
- no personal guarantees can be held over Principal Private Residences.
If one lender turns you down, you can still approach other lenders within the scheme.
Who is eligible?
Your business must:
- have been impacted by Covid-19 – you will need to confirm to the lender that you have been impacted by the coronavirus pandemic
- be carrying out trading activity in the UK
- have 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.
- have a turnover not exceeding £45m per annum
Credit and fraud checks
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. The checks and approach may vary between lenders.
The following are not eligible under RLS:
- Banks, building societies, insurers and reinsurers (excluding insurance brokers)
- Public-sector bodies
- State-funded primary and secondary schools
What a lender will need from you
When you apply for finance from RLS, you’ll need to provide certain evidence to show that you can afford to repay the RLS-backed facility. This is likely to include the following:
- Management accounts
- Business plan
- Historic accounts
- Details of assets
Decision-making on whether a business is eligible for RLS is fully delegated to the British Business Bank’s accredited RLS lenders.
Other business finance support options
The British Business Bank’s Finance Hub has a range of guidance and resources for businesses, including information on how to manage your cashflow and where to find independent advice.