Recovery Loan Scheme

It will support loan sizes of up to £2 million for borrowers who are not covered by the Northern Ireland Protocol.

About Recovery Loan Scheme

Borrowers in Northern Ireland may borrow up to £1 million unless they operate in a sector where aid restrictions are reduced, in which case the maximum that can be borrowed is subject to a lower cap. Agriculture, fisheries/aquaculture, and road freight haulage are examples. Businesses can use the funds for any legit business purpose, such as cash flow management, financing, and growth. Businesses must, however, be able to afford to incur additional debt for these reasons.

24/7 Business Finance works at the ease of its customers so that you can get the benefits of the Recovery Loan Scheme as early as you complete the process. The processing period is also dependent on the nature of your business and your level of preparedness. You could get your loan in a month if you’re well prepared. It could take a long time if you need additional time to finish your application.

The Recovery Loan Scheme aims to enhance the terms on which borrowers can borrow. If a lender can provide a commercial loan with better terms, they will.

Key features include:

• The maximum number of facilities offered under the scheme is £2 million per business group for debtors outside the purview of the Northern Ireland Protocol, and up to £1 million per business group for borrowers within the bounds of the Northern Ireland Protocol. The minimum facility size varies, beginning at £1,000 for asset and invoice finance and increasing to £25,001 for term overdrafts and loans.
• Wide range of products: RLS offers term loans, overdrafts, asset finance, and invoice financing. Not every lender will be able to provide all products.
• Term Length: Overdrafts and invoice finance are accessible for three months to 3 years, with term loans and asset management facilities available for three months to six years.
• Access to multiple schemes: Businesses that took out a CBILS, CLBILS, BBLS, or RLS facility before 30 June 2022 are not barred from applying for RLS after 1 August 2022, but lending under these strategies may decrease the maximum amount you are qualified for in some cases.
• Pricing: The annual effective rate of interest, plus any upfront or other fees, cannot exceed 14.99%.
• Personal Guarantees: Personal guarantees are available at the lender’s discretion, in accordance with their standard commercial lending practices. Principal private properties are not acceptable as security under the Scheme.
• The guarantee is to the lender: After the lender has completed its regular process of recovery, the scheme provides a 70% government-backed assurance against the outstanding balance of the facility. The borrower is always fully responsible for the debt.
• Decision-making delegated to the lender: Recovery Loan Scheme-backed facilities are provided at the borrower’s judgment. For all applicants, lenders are required to conduct standard credit and fraud checks.

RLS assistance, like many government-backed business support functions, is considered a subsidy and is regarded to benefit the borrower. The amount of assistance that a borrower and its larger group can receive in any rolling three-year period is limited. Any previous tax benefit may reduce the amount of money a company can borrow.

• Turnover Limit: The scheme is available for small businesses with turnover limit of £45m
• UK-based: The borrower must be engaged in trading in the UK and, for most businesses, generate more than 50% of its income from trading.
• No Covid-19 impact test required: Unlike the previous version of the scheme, most borrowers are not required to confirm that they were affected by Covid-19.
• Viability test: The lender will take into account the borrower’s business proposition to be viable but may disregard (at its judgment) any issues about the borrower’s short-to-medium-term business performance due to the uncertainty and impact of Covid-19.
• Business in difficulty: The borrower must not be a struggling business, and must not be involved in any relevant insolvency proceedings.
• Subsidy limits: Borrowers must provide written proof that receiving the RLS facility will not result in the business receiving more than the maximum amount of subsidy allowed. All borrowers who receive a subsidy from a government-financed program should be given a written statement confirming the amount and type of assistance received.

Borrowers in Northern Ireland may borrow up to £1m unless they operate in a sector where assistance restrictions are lowered, in which case the maximum that can be loaned is subject to a lower cap. Agriculture, fisheries/aquaculture, and road haulage are examples. Northern Ireland Protocol: All borrowers will be obligated to answer some questions in order to figure out whether they fall within or outside the purview of the Northern Ireland Protocol, which will decide the applicable subsidy limit and thus the possible maximum amount they can borrow under RLS.

Verification of the Covid-19 effect will still be needed for charities and Further Education colleges.