What you need to know about the Government's Recovery Loan Scheme

On 6 April 2021, the UK Government launched the Recovery Loan Scheme (or RLS) to provide financial support to businesses across the UK recovering from the Coronavirus pandemic. The RLS scheme will run until 31 December 2021, subject to review.

It is available through the banks and numerous alternative lenders with more being added all the time. Loans can be used for any legitimate business purpose, including managing cashflow, investment and growth and is designed to appeal to businesses that can afford to take out additional debt finance for these purposes.

The scheme gives the lender a government-backed guarantee, against the outstanding balance of the facility, but as borrower you are still always 100% liable for the debt.

Already had a Bounce back loan or a CBILS loan?

If your business has already borrowed from any of the other coronavirus loan schemes such as a Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS) or the Coronavirus Large Business Interruption Loan Scheme (CLBILS), you are still eligible to apply for a Recovery Loan.

Types of finance available

A lender can provide up to £10 million as long as it is to serve one of the following purposes:

• Term loan

• Overdraft

• Invoice finance

• Asset finance

Personal Guarantees

If you’re borrowing less than £250,000, the lender won’t take any form of personal guarantee.

If you’re borrowing more than £250,000, the lender has the discretion to decide whether to take personal guarantees. However, that guarantee is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied and personal guarantees cannot be held over Principal Private Residences.

For anyone interested in applying for a Recovery Loan or been turned down by your bank, Blaise Commercial Finance can navigate the numerous alternative lenders and present an application that is far more likely to get a successful outcome.

To find out more about the scheme, please get in touch with one of our advisors by calling 01179 175 269 or emailing us at info@blaisecommercialfinance.co.uk