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Shining the spotlight on the business Recovery Loan Scheme

During the first wave of the pandemic an industry survey found that 50% of the UK’s commercial vehicle fleet was off the road and that was before the difficulties caused by Brexit. As UK businesses continue to navigate their way through the pandemic, it’s clear that some sectors have been hit harder than others.

The CBILS (Coronavirus Business Interruption Loan Scheme) has now ended but the launch of the Recovery Loan Scheme (RLS) on 6 April has come as welcome news for many operators. The scheme, which currently runs until 31 December 2021, is designed to improve the loan terms available to businesses but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, we should do so.

Scania Financial Services has been accredited by the British Business Bank for providing asset finance loans under the RLS scheme so here is our guide to how the scheme works:

Am I eligible?

You are eligible for the scheme provided:

·       There is evidence that your business has been affected by Covid-19

·       You are carrying out trading activity in the UK

·       You have a viable business proposition and pass all the necessary credit and fraud checks

If you have already benefited from a Bounce Back Loan scheme, the Coronavirus Business Interruption Loan Scheme or the Coronavirus Large Business Interruption Loan Scheme, the RLS is still available to you but the amount you can borrow may be limited depending on your circumstances.

How much can I borrow and for how long?

If your business has been impacted by Covid-19 you can borrow up to £10 million per business (maximum £30 million per group). Minimum facility sizes vary, starting at £1,000 for asset finance.

You must be able to meet the costs of interest payments and any fees and term loans and asset finance facilities are available from 3 months up to 6 years.

If you’re borrowing £250,000 or less, the lender won’t take any form of personal guarantee. Above £250,000 the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.

As the borrower, you are always 100% liable for the debt.

What can I use the loan for?

The RLS can be used for any legitimate purpose such as helping to improve your cashflow, investment and growth and there is no restriction on turnover.

For further information please complete the form on our RLS page here and we will give you a call back.

About RLS

The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Full legal information and the exact terms of the scheme can be found here.