About the scheme
Key features of the scheme
Eligibility criteria include
A new iteration of the Recovery Loan Scheme (RLS) aims to make it easier for UK businesses to access funds if they want to invest and grow.
This will support non-Northern Ireland Protocol borrowers for facility sizes up to £2M. Borrowers within the Northern Ireland Protocol can borrow up to £1M, as long as they do not operate in sectors with reduced aid limits. These include agriculture, fishing/aquaculture and road transport.
Companies can use the funds for legitimate business purposes such as managing cash flow, investments and growth.
About Recovery Loan Scheme
The new Recovery Loan Scheme (RLS) aims to give UK businesses access to funding if they want to get involved and grow. We support loan sizes of up to £2M for non-Northern Ireland Protocol borrowers. Borrowers in Northern Ireland can borrow up to £1M, as long as they are not operating in a sector with less aid restrictions. In this case, a cap is applied to the lower limit of credit availability. Examples include agriculture, fishing/aquaculture, and road transportation. Companies can use the funds for legitimate business purposes like Cash Flow Management, Funding, and Growth. But for these reasons, companies must be able to afford additional debt.
Key features of the scheme:
Recovery financing schemes aim to improve the conditions under which borrowers can borrow. If lenders can offer commercial loans on better terms, they will.
Key features include:
● The maximum number of facilities offered under this scheme is £2m per corporate group for non-Northern Ireland Protocol borrowers and up to £1m per corporate group for Northern Ireland Protocol borrowers. . The minimum facility size varies from £1,000 for facility and invoice finance to £25,001 for term overdrafts and loans.
● Wide range of products: RLS offers term loans, overdrafts, asset finance and invoice finance. Not all lenders can offer all products.
● Term: Available from 3 months to 3 years for Bank Overdraft and Invoice Finance, and from 3 months to 6 years for Term Loan and Wealth Management Facility.
● Access to multiple programs: Companies enrolled in the CBILS, CLBILS, BBLS, or RLS facilities prior to June 30, 2022 will not be barred from applying for RLS after August 1, 2022 However, making loans using these strategies may reduce the maximum amount. In some cases you are eligible.
● Pricing: The annual effective interest rate plus any upfront or other fees will not exceed 14.99%.
● Personal Guarantees: Personal guarantees are available at the lender’s discretion in accordance with normal commercial lending practices. Privately owned principal property is not accepted as collateral under the scheme.
● Guarantee is passed to the lender: Once the lender completes the regular collection process, the system will provide his 70% government guarantee on the outstanding balance of the facility. Borrowers are always fully responsible for their debts.
● Lender Delegated Decision Making: Facilities backed by collection loan schemes are provided at the discretion of the borrower. Lenders are required to conduct standard credit and fraud checks on all applicants.
RLS support, like many government-sponsored business support functions, is considered a subsidy and a benefit to the borrower. There is a limit to the amount of support a borrower and their large group can receive in her three years. Previous tax incentives may reduce the amount businesses can borrow.
Eligibility criteria include:
● Sales Limit: This program is available to small businesses with a sales limit of £45m.
● UK Resident: Borrower must have transactions in the UK and have at least 50% of his income derived from transactions with most businesses.
● No Covid-19 Impact Testing Required: Unlike previous versions of the program, most borrowers do not need to confirm that they have been affected by Covid-19.
● Feasibility test: Lenders consider the borrower’s business proposition to be viable, but due to the uncertainty and impact of Covid-19, issues related to the short- to medium-term performance of the borrower may (at its discretion ) may be ignored.
● Defaulting company: The borrower must not be a defaulting company and must not be involved in any related bankruptcy proceedings.
● Grant Amount Limit: The borrower must certify in writing that receipt of the RLS facility will not cause the company to receive more than the maximum allowable grant amount. All borrowers receiving grants from government-funded programs must provide a written statement confirming the amount and type of assistance received.
Borrowers in Northern Ireland can borrow up to £1m, as long as they are not operating in a sector with less provincial aid restrictions. In this case, the minimum borrowable amount applies. Examples include agriculture, fishing/aquaculture, and road transportation. Northern Ireland Protocol: All borrowers must answer a few questions to see if they are within the Northern Ireland Protocol. The Northern Ireland Protocol determines the applicable subsidy cap and thus the maximum amount that can be borrowed under the RLS. Proof of Covid-19 impact continues to be required for charities and universities.