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Recovery Loan Scheme

Wed 14th Jul 2021

Recovery Loan Scheme (RLS)

What is the RLS?

The Recovery Loan Scheme, is a new scheme to support access to finance for UK businesses borrowing of up to £10M for an individual business or up to £30M across a group.

RLS Guarantee is to the lender?

Each facility supported by the RLS has up to an 80% guarantee from the UK Government. This is to the lender, not to the Borrower. The Borrower remains responsible for repaying the entire RLS Facility at all times. Should the Borrower default, the Lender will seek repayment from the Borrower for the full outstanding balance, as it would for any other commercial facility.

What is the minimum advance under the RLS?


What term can I borrow this over?

Standard funding term is up to 5 years, however 6 years may be considered by exception.

What can RLS be used for?

RLS facility can be used for legitimate business purpose including, but limited to, managing cash flow, or for investment and growth purposes. The Borrower must confirm that it has been impacted by Coronavirus (COVID-19) to be considered for eligibility under the scheme.

What fees and interest rate can I expect?

Interest rates and fees charged by lenders will depend on the specific lending proposal, but lenders are required to pass on the economic benefit of the guarantee to borrowers after taking costs into account including the scheme fee.

Can Personal Guarantees be taken under the scheme?

For RLS facilities of £250,000 or less, personal guarantees cannot be taken by lenders in relation to the facility. For facilities above £250,001 personal guarantees may still be required, at a lenders discretion, but no recovery action can be taken over a Principle Private Residence and recoveries are capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied.

Are businesses with CIBLS/CLBILS/BBLS facilities eligible for RLS?

Yes, Businesses with CIBLS, CLBILS and BBLS facilities can access RLS, providing they meet the eligibility criteria for RLS and any additional lending is considered affordable by the lender. There is a limit on the overall borrowings that a customer can have with a BBB guarantee