The Recovery Loan Scheme is a government-backed loan scheme designed to support businesses as they recover from the impacts of the COVID-19 pandemic. The scheme is open to businesses of all sizes and sectors, including those who have already received support through other government loan schemes.
The Recovery Loan Scheme (RLS) has been renewed until 2024, supporting UK businesses as they invest and grow. The latest version of the scheme was published on 1 August 2022, with changes to the previous iteration. One notable difference is that most borrowers are no longer required to confirm that their business has been affected by COVID-19.
RLS provides a government guarantee for small business lending, with the government underwriting 70% of what the lender could lose if a business defaults. The scheme was launched in April 2021 to support businesses recovering from the COVID-19 pandemic and was initially set to run until the end of 2021, subject to review. The scheme was extended until June 2022 in the Autumn Budget of 2021 and was further revamped with a lower maximum amount available to businesses and a lower government guarantee.
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This scheme is a government initiative that aims to support UK businesses in accessing finance. Its original iteration was designed to provide assistance to businesses recovering from the Covid-19 pandemic, and it closed on June 30, 2022. The latest iteration of RLS was launched in August 2022 and will run for two years, offering finance to businesses looking to invest and grow.
One notable change from the previous iteration is that, for most borrowers, there is no longer a requirement to confirm that their business has been negatively impacted by Covid-19. RLS is intended for business purposes, such as managing cash flow and funding investment and growth. It is available to a broad range of businesses, including those that have previously taken out CBILS, CLBILS, or BBLS.
RLS has replaced previous schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), and the Bounce Back Loan Scheme (BBLS), which all closed to new applicants on March 31, 2021. While the aim of the Recovery Loan Scheme is to provide better loan terms for UK businesses, the terms are reflective of the protection offered to lenders by the 70% government guarantee.
The Recovery Loan Scheme provides businesses with the flexibility to use the financing for any legitimate business purpose. Whether it’s managing cash flow, investing in marketing, buying equipment, meeting a one-off cost, helping with payroll, or growing the business, the scheme is designed to support businesses with their financial needs.
The term length for the financing depends on the specific product chosen by the business. For term loans and asset finance facilities, businesses can borrow for up to six years, with a minimum borrowing period of three months. For overdrafts and invoice finance facilities, businesses can borrow for up to three years, with a minimum borrowing period of three months.
At HC Finance Group, we understand that every business has unique financial needs and goals. Our team of experienced professionals will work with you to identify the best financing options for your business, taking into account your specific circumstances and requirements.
We are committed to supporting your business in achieving its goals and overcoming financial challenges. With the Recovery Loan Scheme, we can provide the financing you need to thrive and grow, no matter what the future holds.
Our online application process for the Recovery Loan Scheme is designed to be quick and straightforward. By answering a few questions about yourself and your business, you can apply for the financing you need with ease. You can apply for the scheme today by clicking on the button below.
The Recovery Loan Scheme (RLS) was introduced on April 6, 2021, and is now scheduled to end in 2024. While the original scheme was initially set to close at the end of 2021, the Treasury announced its extension for another six months until June 30, 2022, with a reduced maximum amount available to businesses and a lower government guarantee. However, in July 2022, the government announced another extension of the scheme for an additional two years, thus continuing its support for businesses impacted by the COVID-19 pandemic.
The Autumn Budget 2021 announced that the Recovery Loan Scheme would be limited to small and medium-sized enterprises (SMEs) from 1 January 2022 onwards. This was a significant change from when the scheme was first introduced, as businesses of any size could apply for a loan or overdraft. This key difference set the Recovery Loan Scheme (RLS) apart from the other coronavirus finance support schemes it replaced (BBLS, CBILS, CLBILS).
To access the RLS, businesses must meet certain requirements. These include having a turnover of less than £45 million, being engaged in trading activity in the UK, being viable (meaning that the lender must assess that the borrower has a viable business proposition but may overlook any short-to-medium-term performance concerns arising from the uncertainty and impact of COVID-19), and not being in any collective insolvency proceedings or other business difficulties.
In cases where a lender can provide finance on regular commercial terms without the need for the scheme, they may do so. Lenders must perform credit and fraud checks on all RLS applicants, but the specific checks and approaches vary depending on the lender. Although lenders may follow their standard commercial lending practices and take personal guarantees, Principal Private Residences cannot be accepted as security under the scheme.
In 2022, the UK government introduced an updated version of the Recovery Loan Scheme, which enables businesses to borrow up to a maximum of £2 million for all types of borrowing, including term loans, overdrafts, invoice finance, and asset finance.
This maximum limit of £2 million will remain in place for the new version of the Recovery Loan Scheme until 2024. However, it is important to note that this limit only applies to borrowers outside the scope of the Northern Ireland Protocol. For businesses inside the scope of the protocol, the maximum limit has been reduced to £1 million.
The minimum facility sizes vary, depending on the type of financing required. For asset finance and invoice finance, the minimum facility size is £1,000. For term loans and overdrafts, the minimum facility size is £25,001.
It is no secret that businesses with poor credit have limited options available to them when it comes to the Recovery Loan Scheme. They often have to contend with higher interest rates and fewer lending options.
However, it is worth noting that some businesses that have been previously denied credit have been able to successfully apply for the Recovery Loan Scheme. Lenders evaluate each application based on its own merits and on a case-by-case basis. Therefore, if your business has been declined in the past, it is still worth exploring the possibility of applying for the Recovery Loan Scheme.
If the Recovery Loan Scheme is not a feasible option for your business, there are still other financing alternatives that you can consider. At HC Finance Group, we can help you explore other financing options that are available to your business. By registering with us, you can gain valuable insight into the various funding options available to you and make informed decisions that will help your business grow and thrive.
When the Recovery Loan Scheme came to a close on June 30th, 2022, over 80 lenders had been accredited by the British Business Bank for the previous version of the program. However, the latest iteration of RLS now only has 8 accredited lenders. It is important to note that this list is subject to change as the British Business Bank continues to update it until the program’s closure in 2024. Currently, the lenders accredited under the new iteration of RLS include:
HC Finance Group helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a lead generation agency and do not provide loans or other finance products ourselves. We can introduce you to a panel of lenders, equity funds and grant agencies. Whichever lender you choose we may receive commission from them (either a fixed fee of fixed % of the amount you receive) and different lenders pay different rates. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. HC Finance Group can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness.
HC Finance Group Ltd is a company incorporated in England and Wales with registered number 14705045 whose registered address is Unit 5, Grange farm Buildings, Grange Road, Tiptree, Essex. CO5 0QQ
01206 581015
info@hcfinancegroup.com
STUDIO 9, GRANGE FARM BUILDINGS
GRANGE ROAD
TIPTREE, ESSEX
CO5 0QQ
HC Finance Group helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a lead generation agency and do not provide loans or other finance products ourselves. We can introduce you to a panel of lenders, equity funds and grant agencies. Whichever lender you choose we may receive commission from them (either a fixed fee of fixed % of the amount you receive) and different lenders pay different rates. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. HC Finance Group can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness.
HC Finance Group Ltd is a company incorporated in England and Wales with registered number 14705045 whose registered address is Unit 5, Grange farm Buildings, Grange Road, Tiptree, Essex. CO5 0QQ
