The Recovery Loan Scheme

The Recovery Loan Scheme aims to improve the terms on offer to borrowers. If a lender can offer a commercial loan on better terms, they will do so.

Recovery Loan Scheme

The Recovery Loan Scheme

The Recovery Loan Scheme (RLS) is designed to support access to finance for UK businesses as they look to invest and grow.

The scheme will support facility sizes of up to £2million for borrowers outside the scope of the Northern Ireland Protocol. Borrowers in scope of the Northern Ireland Protocol may borrow up to £1million unless they operate in a sector where aid limits are reduced – in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries/aquaculture, and road freight haulage.

Businesses can use the finance for any legitimate business purpose – including managing cashflow, investment and growth. However, businesses must be able to afford to take out additional debt finance for these purposes.

The British Business Bank administers the scheme, there are several accredited lenders that Wattsford Commercial Finance will broker finance on behalf of clients.

What can the Recovery Loan Scheme be used for?

  • Access cash flow
  • Grow your business
  • Purchase equipment
  • Pay a one-off cost
  • Help with payroll
  • Invest in marketing

Key features of the Recovery Loan Scheme

The Recovery Loan Scheme aims to improve the terms on offer to borrowers. If a lender can offer a commercial loan on better terms, they will do so. The scheme runs to 30th June 2024.

  • Up to £2 million per business group
    The maximum amount of a facility provided under the scheme is £2 million per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • Wide range of products
    RLS supports term loans, overdrafts, asset finance and invoice finance facilities. Not all lenders will be able to offer all products.
  • Term length
    Term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years.
  • Pricing
    The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.
  • Access to multiple schemes
    Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS after 1 August 2022, but in some instances borrowing under these schemes may reduce the maximum amount you are eligible for.
  • Personal Guarantees
    Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the Scheme.
  • Guarantee is to the lender
    The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.

Indicative Terms

Get an understanding of how much finance you may be able to raise for your business and on what terms before making an application.

Eligibility criteria includes

  • Turnover limit
    The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).
  • UK-based
    The borrower must be carrying out trading activity in the UK and, for most businesses, generating more than 50% of its income from trading activity.
  • No Covid-19 impact test required
    Unlike the previous iteration of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19.
  • Business in difficulty
    The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings.
  • Viability test
    The lender will consider that the borrower has a viable business proposition but may disregard (at its discretion) any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
  • Subsidy limits
    Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive. All borrowers in receipt of a subsidy from a publicly funded programme should be provided with a written statement, confirming the level and type of aid received.

Some benefits of using us

In addition to property valuations, building insurance, and legal support, we offer a wide range of additional services. For information on this, please see our Business Support Services and Trusted Partner Network.

Our business support and brokerage services include fully packaging and submitting your business loan application in addition to ensuring the most competitive rates and terms. We will ensure that your recovery loan scheme application is prepared quickly and efficiently. At the same time, we will keep you updated on your application’s progress in order that funds are available in the shortest possible time.

Our offer

In particular, we offer all our clients a truly ‘one-stop-shop’ facility, specifically to provide you with a fully managed and professional business support and brokerage service. Our mission is to secure the most competitive funding offer for your circumstance available from the whole of the market.

Whatever your finance requirements, we offer a free, impartial, and confidential initial consultation and will quickly assess your funding options.

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