New iteration of Recovery Loan Scheme now live

New iteration of Recovery Loan Scheme now live

In welcome news to SMEs, it was announced last month, as noted here, that the Recovery Loan Scheme (RLS) would be extended until 2024.

While the new iteration continues to offer loans of up to £2million and to be 70% Government-backed, there have been some tweaks to the eligibility criteria and key features. The changes to note are highlighted below:

• Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. However, Principal Private Residences cannot be taken as security.
• Up to £2million per business group for borrowers outside the scope of the Northern Ireland Protocol. For businesses that fall under this, the loans are up to £1million.
• The Annual Equivalent Rate (AER), including fees and interest, cannot be more than 14.99%.
• Businesses that took out an RLS facility (or CBILS, CLBILS, BBLS) before 30 June 2022 can still access a loan through the extended scheme, but it may be the case that the maximum amount available for borrowing is reduced.

Crucially, there’s no longer a requirement to showcase COVID-19’s impact. However, borrowers must not be experiencing financial difficulties and lenders will undoubtedly like evidence of a sustainable business model. The exceptions to this are charities and Further Education colleges. These organisations are still required to confirm the pandemic’s impact on their operations.

Further information on the key features of the scheme and the eligibility criteria can be found here.

The participating lenders are listed on the British Business Bank website, which is administering the scheme on behalf of the Government, and applications are now being accepted.

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If you have any queries regarding the Recovery Loan Scheme, please get in touch.