The Recovery Loan Scheme (RLS) launched on 6th April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including, managing cashflow, investment and growth. It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.
At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022.
From 1 January 2022, the following changes will come into force:
- The scheme will only be open to small and medium sized enterprises (turnover <£45m)
- The maximum amount of finance available will be £2 million per business (maximum amount per Group limited to £6m)
- The guarantee coverage that the government will provide to lenders will be reduced to 70%
- These changes will apply to all offers made from 1 January 2022
What Shire Leasing can offer through the RLS
Shire Leasing PLC is accredited to deliver the Recovery Loan Scheme(RLS) via the British Business Bank, enabling us to support eligible businesses with Asset Finance (including Sale and Leaseback/Sale and HP Back) and Loans over 3 to 5 year payment terms.
Asset Finance
- £15,000 minimum value
- £200,000 maximum value
- No personal/director guarantees required
- 3-5 year payment terms
Term Loans
- £25,001 minimum value
- £50,000 maximum value
- No personal/director guarantees required
- 3-5 year payment terms
How to apply with Shire Leasing
Existing customers
If you are an existing customer, we encourage you to contact your account manager directly to discuss your business’s requirements. This will be the quickest way to begin the journey. If you do not know your account manager details, you can also complete the form below.
New customers
If you have not worked with Shire Leasing in the past, you should complete the enquiry form at the bottom of this page so a member of our team can contact you.
Core scheme features
What are the key features of the RLS Scheme?
Not all lenders, including Shire Leasing, provide every type of finance available under RLS. You can find out exactly what we can offer above.
Businesses may choose to consider approaching other accredited lenders if they are unable to access the finance they need via Shire Leasing.
- Up to £10m facility per business: The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
- Term length: Term loans and asset finance facilities are available from three months, for up to six years, with overdrafts and invoice finance available from three months, for up to three years.
- Interest and fees to be paid by the borrower from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
- Access to multiple Covid-19 schemes: Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS
- Personal Guarantees: Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.
- Guarantee to the Lender: The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.
What is the eligibility criteria?
The RLS facility must be used for an eligible purpose:
- Working Capital
- Investment and growth
- Refinancing existing debt/debt consolidation
To be eligible for a business finance facility under RLS, your business must:
- Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
- UK-based: The borrower must be carrying out trading activity in the UK.
- 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.
- Credit and fraud checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants. The checks and approach may vary between lenders.
- Turnover limit: There is no turnover restriction for businesses accessing the scheme.
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.
Shire Leasing’s Hire Purchase and Sale and Hire Purchase Back eligibility:
- Where the balanced financed is between £15,000 and £25,000, only non-regulated customers will qualify for Hire Purchase and Sale and Hire Purchase Back solutions with Shire Leasing.
- Regulated customers (ie Sole traders, partnerships up to 3 and unincorporated associations) will only qualify for these asset finance solutions with Shire Leasing if the total balance financed exceeds £25,001.
Supporting your application
Before making an application, you should check that you meet the eligibility criteria of RLS and have reviewed what different lenders can offer.
It may be useful to prepare the following in advance, to help us to speed up the application.
- The amount you would like to borrow
- What the money is for — so we can check that it’s a suitable business purpose and the right type of finance for your needs
- The period over which you would like to make the repayments
You will need to provide certain documents when you apply for an RLS-backed facility. These are likely to include:
- Management accounts
- A business plan
- Historic accounts
- Details of assets
Decision-making on whether a business is eligible for RLS is fully delegated to the British Business Bank’s accredited RLS lenders.
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.
Important information
- Finance is for business use customers only.
- All finance is subject to credit status, approval, terms and conditions.
- As with any other commercial transaction, the borrower is always responsible for repayment of the full value of any facility supported by RLS.
- The guarantee is to the lender, and not the small business.
- Any queries from a business with an active or historic EFG facility, including guarantee fee collection or alterations to their repayment profile should raise them with their lender, and not with the British Business Bank.
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.
For more information directly from the British Business Bank, please click here.
For more information directly from the British Business Bank, please click here.