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On 6th April 2021, the Government launched the Recovery Loan Scheme (RLS) to provide small and large businesses alike the funds they need to recover from the Covid-19 pandemic. Each business can access up to £10 million with the Government guaranteeing 80% of the finance to a network of accredited lenders listed with the British Business Bank.
As RLS is categorised as a business loan, borrowers are 100% liable for the debt. The scheme is open to applicants up to 31st December 2021; however, this date is subject to review. In effect, the RLS replaces the earlier Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) which have been closed to new applicants from 31st March 2021.
Is my business eligible?
Any UK trading business can apply for an RLS loan so long as the following criteria can be demonstrated:
- The business would be viable were it not for the pandemic.
- The business has been adversely impacted by the pandemic or government restrictions.
- The business is not in collective insolvency proceedings (those in scope of the Northern Ireland Protocol will need to meet different eligibility rules).
How is the RLS scheme designed?
The scheme is split into two types of financial support:
- Term loans or overdraft facilities are offered between £25,001 and £10 million per business and must be repaid within 3-years.
- Invoice and asset finance is available between £1,000 and £10 million per business and must be repaid within 6 years.
Visit the Government website for more information and to start the application process. Alternatively, details of the scheme and a list of accredited lenders can be found on the British Business Bank website.