Recovery Loan Scheme

Recovery Loan Scheme (RLS)

What is the Recovery Loan Scheme?

The new iteration of the Recovery Loan Scheme (RLS) launched in August 2022 and is designed to support access to finance for UK small businesses as they look to invest and grow.

Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022, although in some cases it may reduce the amount a business can borrow.

Recovery Loan Scheme-backed facilities are provided at our discretion. We are required to undertake our standard credit and fraud checks for all applicants.

You will have to repay this loan in full

You remain liable for 100% of the loan and we will always seek to recover any outstanding debt from you and the proceeds of any security you, or any security provider (including personal guarantor) on your behalf, has given for the loan.

Loan amount: £25,001 to £75,000.

Loan term: 3 months to 5 years

Interest Rate: 10.50% fixed per annum

Loan Administration Fee: 2% of the total loan value payable in advance

Personal Guarantees: Personal guarantees can be taken at our discretion, in line with our 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.

Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. 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. 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.

Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.

  • 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: This is a UK wide scheme. However, because DSL only operates in Scotland, the borrower must be carrying out trading activity in Scotland.

    No Covid-19 impact test required: Unlike with the previous phases of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19. For charities and Further Education colleges, confirmation of Covid-19 impact will still be required in some instances.

    Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.

    Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings.

    Purpose: the facility must be used to support trading in the UK and cannot be used to support certain export related activities. There are certain restrictions on the use of proceeds of facilities in the agriculture, fisheries and aquiculture, and road freight transport sectors for borrowers impacted by the Northern Ireland Protocol.

Depending upon the legal status of your business, DSL requires the following documents to be submitted along with your RLS application form. Application packs are available at the bottom of this page.

Paperwork required from Sole Traders & Partnerships

 

Paperwork required from Ltd Companies & LLP’s

  • Completed & Signed Application Form
  • Completed Business Information Form
  • Minimum of 1 year’s financial projections (click here to see guidance notes)
  • The last 2 years certified accounts and your most recent management accounts (no more than 3 months old)
  • The last 3 months business bank statements
  • Completed & Signed Director/Shareholder Identify Verification Form(s) for all directors and shareholders (with 20% shares or more). 
  • Proof of identification and home addresses should be included for all owners & partners (click here to see list of acceptable forms of identification).

Please note, the following are not eligible under RLS:

  • Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers)
  • Public sector bodies.
  • State funded primary and secondary schools

Business Finance Support

The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services. For more information, visit : https://www.british-business-bank.co.uk/finance-hub/

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. Visit http://www.british-business-bank.co.uk/recovery-loan-scheme

Download Your Application Pack

Example Loan Calculator

An example for Illustrative purposes:

Annual Interest Rate (fixed) is 9.95% p.a. (11.3% APR) based on borrowing £50,000 and repaying over 5 years in 60 monthly repayments of £1,061.12 each with total amount payable of £64,667.41.

The loan calculator is designed to help you work out what your total and monthly repayments will be, depending on the loan term and amount you choose. Under the Recovery Loan Scheme, we offer loans from £25,001 to £75,000 at a fixed interest rate of 9.95% per annum (11.3% APR) and you can choose a loan repayment term of up to five years. The APR remains the same for the loan amount and duration.

 

Get in touch to find out more.

All applicants are assigned a Loan Officer throughout the process and receive face-to-face, pre and post loan drawdown support. Our friendly team are here to advise and support you every step of the way.

CEIS

CEIS is the UK’s largest and most experienced social enterprise support agency. Established in 1984, CEIS has developed a series of training, support and investment programmes that have been widely adopted and replicated. Whether supporting or financing social enterprises, organising events or delivering innovative employability programmes to help people back into work, the staff at CEIS are driven to enable individuals, organisations and communities.

CEIS’s mission is to tackle inequality, strengthen communities and improve the performance and impact of businesses which contribute to our society. For more information, please visit their website.