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Guidance on Recovery Loan Scheme

With the final application dates for support under the existing Coronavirus Loan Schemes (Coronavirus Business Interruption Loan Scheme and Bounce Back Loans) being 31 March 2021, a new loan scheme to support UK business as they grow and recover from the disruption of the COVID-19 pandemic has been launched by the Government.

The scheme launches on 6 April 2021 and is open until 31 December 2021, subject to review. Loans will be available through a network of accredited lenders, whose names will be made public in due course.

What business finance options will be available?

Benefits of the Recovery Loan Scheme

  • The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.
  • No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.
  • Term loans and overdrafts will be available between £25,001 and £10 million per business.
  • Invoice finance and asset finance will be available between £1,000 and £10 million per business.
  • Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
  • No minimum annual turnover requirement.
  • No minimum trading history requirement.

Eligibility for the Recovery Loan Scheme

Portman Asset Finance are here to help businesses access the Recovery Loan Scheme for emergency funding throughout this situation if the business:

  • Is trading in the UK
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
  • Self-certify that it has been adversely impacted by the coronavirus (COVID-19)
  • Is not in collective insolvency proceedings.

Businesses who have accessed previous Coronavirus Loan Schemes will still be eligible for finance under this scheme if they meet the eligibility criteria.

How to apply for the Recovery Loan Scheme?

The scheme will launch on 6 April 2021. Further details on how to apply and details of accredited lenders will be released in due course.

For more information, see our business finance options and more on the Recovery Loan Scheme from Portman.

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Government-backed Finance FAQs

Can you have a CBILS and RLS

Yes. Having CBILS, CLBILS, and BBLs does not exclude you from the Recovery Loan Scheme. You can still access RLS, provided you meet the eligibility criteria.

How do I apply for a Recovery Loan?

The eligibility requirements for a Recovery Loan are: a minimum 2 years trading history, a minimum £100k turnover, UK-based in its business activity and adversely impacted by Covid-19. Complete our eligibility form with a few basic details and one of our Account Managers will call you back to discuss your needs. We will ask to you some business documentation, then Portman will complete and submit applications on your behalf.

How does a Recovery Loan compare to other options?

The government backs 70% of a Recovery Loan which means they carry some of the risk should a business default on the loan. As a result, more businesses can access finance and rates can be more competitive. However the actual rate a business is offered can still vary based on individual credit history and trading circumstances. Traditional business loans offer an alternative and in some circumstances may be more suitable. Asset Finance: Hire Purchase or Lease Finance, typically carries a lower risk for the lender because the asset itself acts as security and can be reclaimed by a lender if the borrower defaults on the loan. Typically this means that rates can be lower, particularly for high value assets. Your Portman Account Manager can discuss options with you, depending on your intended purchase, but ultimately the choice as to what’s right for your business is yours.

How long does an RLS facility last?

An RLS facility lasts up to six years for loans and asset finance. Overdraft and invoice finance facilities last up to 3 years.

I thought the Recovery Loan Scheme finished?

The UK Government launched Phase 2 of the scheme on 1st September 2022 and will be closed to further applications from midnight on 30th June 2024. However, RLS is being renamed the Growth Guarantee Scheme with the same terms and being extended until 31st March 2026, following an announcement in the Government’s Spring Budget, with a pledge of £200m in funding.

Is the Recovery Loan Scheme ending soon?

The current iteration of the Recovery Loan Scheme was launched on 1st September 2022 and will be closed to further applications from midnight on 30th June 2024. However, RLS is being renamed the Growth Guarantee Scheme with the same terms and being extended until 31st March 2026, following an announcement in the Government’s Spring Budget, with a pledge of £200m in funding.

What can a Recovery Loan be used for?

Businesses can borrow between £10,000 and £2,000,000. Any investment plans that require funding can be accelerated using a finance product that protects an individual’s Principal Private Residence. Repayment periods are up to 6 years. The loan can be used for any legitimate business purpose including: equipment, vehicles, cashflow, stock, refurbishments, technology and marketing. 

Can I pay my Recovery Loan off early?

You can pay your Recovery Loan off at any time. Your lender can provide you with a settlement fee, which you can then pay directly to them. That’s it. Portman acts as an approved broker for Recovery Loans and not a lender, check your paperwork to find out who your lender is.