What is the Recovery Loan Scheme (RLS)?
The Recovery Loan Scheme (RLS) launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including managing cashflow, investment and growth. It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS or BBLS facility are also able to access the new scheme.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.
At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022.
From 1 January 2022, the following changes will come into force:
- The scheme will only be open to small and medium sized enterprises (turnover <£45m)
- The maximum amount of finance available will be £2 million per business (maximum amount per Group limited to £6m)
- The guarantee coverage that the government will provide to lenders will be reduced to 70%
- These changes will apply to all offers made from 1 January 2022
Proud to be supporting British businesses
BLG specialises in providing development finance to UK SME property developers and we are delighted to receive accreditation from the British Business Bank as a lender under the Recovery Loan Scheme (RLS).
We are proud to be supporting British businesses navigate through these uncertain times by providing property-secured loans through this government-backed scheme.
We will be offering development finance through RLS with flexible loan structures to support individual requirements.
To discuss your Recovery Loan Scheme (RLS) requirements, please email us at [email protected] or call us to discuss.
- Up to £10m facility per business: The maximum amount of a facility provided by BLG under the scheme is £10m per Please note the minimum loan size BLG offers is £1m.
- Term length: Term loans are available from 12 to 24 months.
- Interest and fees to be paid by the borrower from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
- Access to multiple Covid-19 schemes: Businesses that have taken out a CBILS, CLBILS or BBLS facility are also 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: A personal guarantee will be required. 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.
- Guarantee to the Lender: The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.
BLG’s RLS funding is dedicated to supporting UK SME property developers in development finance. We do not offer cashflow loans under RLS.
To be eligible for applying for the RLS, a business must meet certain eligibility criteria including but not limited to:
- Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
- UK-based: The borrower must be carrying out trading activity in the UK.
- Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
- Credit and fraud checks for all applicants: BLG will be required to undertake credit and fraud checks for all applicants. Our checks and approach may differ to that of the other lenders.
- Turnover limit: There is no turnover restriction for businesses accessing the scheme.
- Minimum loan facility: In BLG, the minimum loan size we accept for RLS loan applications is £1m which is in line with the loan size we do with our normal development loans.
Please note: The following businesses are NOT eligible under the RLS:
- Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers).
- Public sector bodies.
- State funded primary and secondary schools.
For more information on our Recovery Loan Scheme support for development finance, please email [email protected] or call us to discuss.
The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.