About the scheme:
The new iteration of the Recovery Loan Scheme (RLS) launched in August 2022 and is designed to support access to finance for UK small businesses
as they look to invest and grow.
The Recovery Loan Scheme aims to improve the terms on offer to borrowers. If a we can offer a commercial loan on better terms, we will
do so.
Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022,
although in some cases it may reduce the amount a business can borrow.
Recovery Loan Scheme-backed facilities are provided at the discretion of us the lender. We are required to undertake our standard credit and fraud
checks for all applicants.
Scheme features include:
Up to £2m facility per business group: The maximum amount of a facility provided under the scheme is £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
A borrower in scope of the Northern Ireland Protocol may borrow up to £1m per business group, unless such borrower operates in a sector where aid limits are reduced, in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries / aquaculture and road freight haulage.
Term length: Term loans and asset finance facilities are available from three months up to five years, with overdrafts and invoice finance available from three months up to three years.
Personal Guarantees: Personal guarantees can be taken at the our discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the Scheme.
Guarantee is to the lender: The scheme provides us with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider
group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow.
All borrowers in receipt of a subsidy from a publicly-funded programme should be provided with a written statement, confirming the level and type of aid received.
Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive.
Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.
