Recovery Loan Scheme (RLS)

Businesses may choose to consider approaching other accredited lenders if they are unable to access the finance they need via Shire Leasing.

• Up to £2m facility per business: The maximum amount of a facility provided under the scheme is £2m per business (maximum £6m 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.

• 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: Businesses with a turnover not exceeding £45m per annum.

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.

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.

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.

For more information directly from the British Business Bank, please visit the British Business Bank’s website.