British businesses can now apply for affordable loans of between £1,000 and £10 million under the new Recovery Loan Scheme (RLS).
Here’s everything you need to know about the initiative and how it could help your business recover from the coronavirus pandemic.
What is the Recovery Loan Scheme?
The RLS is a Government-backed corporate finance scheme designed to support businesses as they move into the recovery stage of the pandemic.
Replacing the existing Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS), the RLS opened for applications on Tuesday, 06 April 2021.
Commenting on the launch of the scheme, Business Secretary Kwasi Kwarteng said: “The launch of our new Recovery Loan Scheme will provide businesses with a firm foundation on which to plan ahead, protect jobs and prepare for a safe reopening as we build back better from the pandemic.”
Is the scheme guaranteed?
Yes, the Government will guarantee the first 80 per cent of the loan or finance facility.
Do I need to provide a personal guarantee?
Personal guarantees are not required for facilities of £250,000 or less.
Above £250,000, the maximum amount that can be covered under the RLS is capped at a maximum of 20 per cent of the outstanding balance of the RLS facility after the proceeds of business assets have been applied.
How much can I get?
Term loans and overdrafts of between £25,001 and £10 million are available per business, while invoice finance and asset finance of between £1,000 and £10 million will be available per business.
How can the loan be used?
You can use the finance for any “legitimate business purpose” – such as managing cashflow, investment and growth.
Is my business eligible for support?
Businesses of any size or sector are eligible for finance, providing they trade in the UK and can demonstrate that their operation is:
- viable or would be viable were it not for the pandemic
- has been impacted by the coronavirus pandemic; and
- is not in collective insolvency proceedings.
For help and advice on related matters, please get in touch with our expert corporate finance team today.