EVERYTHING YOU NEED TO KNOW ABOUT THE RECOVERY LOAN SCHEME (RLS)

Updated: Mar 22



The new Recovery Loan Scheme (RLS) gives UK businesses ongoing access to finance as they recover from the economic impact of the COVID-19 pandemic.

The scheme can be used for any legitimate business purpose, including managing cashflow, investment and growth. It is designed to appeal to businesses that can afford to take out additional debt finance for these purposes.


At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022 but with significant changes from the beginning of 2022.



WHAT IS CHANGING FROM 2022?

The scheme was due to end on 31 December 2021, but Chancellor Rishi Sunak announced that it would indeed continue until June 2022, albeit with a few changes. These changes are as follows:

  • The government guarantee to lenders will reduce from 80 percent to 70 percent

  • Limit businesses eligible to SMEs only

  • Finance will be capped at £2m per business

WHAT ARE THE BENEFITS?

From January, lenders are expected to tighten their criteria and increase interest rates on the Government-backed RLS from January 2022.

The benefits of the current RLS:

  • Available from £50,000 to £10million

  • Available as Cashflow or Equipment Finance

  • Up to 7 Year Agreement Terms

  • No Directors Guarantees (Up to £250k)

  • No Early Settlement Fees

  • Available in addition to CBILS and BBLS


WHO CAN AND CAN’T APPLY?

Who can apply:
  • Have been affected by Covid-19 - you'll need to confirm to the lender that the coronavirus pandemic has had an impact on your ability to operate

  • Be carrying out trading activity in the UK

  • Have a viable business proposition – the lender may disregard (at its discretion) any concerns over your business’ performance over the short to medium term because of the uncertainty and impact of Covid-19

There is no restriction on turnover, meaning your business can access the scheme regardless of what amount of revenue it generates.


When you apply to RLS, the lenders are required to carry out credit and fraud checks for your business. The type of checks, and how they’re done, may vary between lenders.


Who can’t apply:
  • A bank, a building society, an insurer or a reinsurer (this doesn’t include insurance brokers)

  • A public-sector body

  • A state-funded primary or secondary school

  • If you’ve already used a coronavirus support scheme

If your business has already borrowed from a previous coronavirus loan scheme – namely:

  • The Bounce Back Loan Scheme (BBLS)

  • The Coronavirus Business Interruption Loan Scheme (CBILS)

  • The Coronavirus Large Business Interruption Loan Scheme (CLBILS)

RLS is still open to you, although the amount you have borrowed under an existing scheme may in certain circumstances limit the amount you may borrow under RLS.



HOW TO APPLY?

If you would like to secure your recovery loan then start your application now by click the website link below or alternatively you can get into contact with one of our finance brokers on 01908 429888 or via info@approved-finance.co.uk

https://www.approvedbusinessfinance.co.uk/recovery-loan-scheme


 

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