Extended Recovery Loan Scheme now available
You may recall the UK government launching the Recovery Loan Scheme (RLS) in April 2021.
The RLS was a key initiative to help support UK businesses recover from the impact of the COVID-19 pandemic. The government provided a percentage guarantee for eligible loans provided. This gave lenders confidence in continuing to provide finance to UK businesses. Originally due to end in December 2021 the scheme was extended in the 2021 Autumn budget to June 2022.
In July this year the government announced that the scheme was to be further extended offering Government-backed loans until the end of June 2024. One change from the previous RLS restrictions is that, for most borrowers, there is no requirement to confirm they have been adversely affected by COVID-19. As a result, the RLS may be an option for those who are struggling to weather the current economic storm as well as businesses still trying to recover from the impacts of COVID-19.
The relaunched RLS became available in August. It will support finance of up to £2 million per business group. However, for borrowers in scope of the Northern Ireland Protocol the maximum loan will be £1 million. The actual amount and terms offered will be at the discretion of participating lenders.
To be considered for the scheme your business must meet the following criteria:
- a turnover less than £45 million
- based and trading in the UK
- generating more than 50% of their income from trading activity
- demonstrate that you have the ability to repay the facility
- the business is not categorised as a business in difficulty. This includes not being in relevant insolvency proceedings.
The RLS is administered by the British Business Bank. More information including FAQs for applicants can be found here on the British Business Bank website.
Although the latest extension is welcome news, it is worth noting that finance provided through the RLS may not be the most suitable option for all eligible businesses. If you would like to discuss the RLS in more detail or require help in collating the information required to apply, please get in touch.
