A government-backed scheme is set to help small businesses recover from the Covid pandemic, financially aiding cashflow, growth and investment.
The British Business Bank notes the following features of the Recovery Loan Scheme:
- Up to £10m facility per business: The maximum amount of a facility provided under the
scheme is £10m per business (maximum £30m per group). 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: Businesses can choose from term loans, overdrafts, asset finance
and invoice finance
- 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.
- Interest and fees to be paid by the business from the outset: Businesses are required to meet
the costs of interest payments and any fees associated with the RLS facility.
- Turnover limit: There is no turnover restriction for businesses accessing the scheme.
- Access to multiple schemes: 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 a previous scheme may in certain circumstances limit the amount they may borrow under RLS.
- Personal Guarantees: Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be recovered under a personal guarantee 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.
- Guarantee to the lender: RLS provides the lender with an 80% government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.
The British Business Bank is also inviting all businesses interested in the scheme to contact them on .