What is the Recovery Loan Scheme (RLS)?
RLS aims to help businesses of any size across the UK affected by Covid-19 and to help businesses recover and grow after the disruption of the pandemic. It can be used for any legitimate business purpose, including managing cash flow, investment and growth.

What are the key features of RLS?
RLS guarantees a wide range of products, covering term loans, overdrafts, asset financing and invoice financing. Companies can borrow up to £10 million, which is available on repayment terms up to six years (for loan and asset financing) and up to three years (for overdrafts and invoice financing).

Companies will be obliged to cover the costs of interest payments and fees associated with the facility from the outset.

When making their assessment, our lenders may overlook concerns over short-to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.

Am I eligible?
The scheme is open to most businesses, who meet the eligibility criteria, regardless of turnover.

A company with an existing facility under either the Bounce Back Loan Scheme (BBLS), the Coronavirus Business Interruption Loan Scheme (CBILS) or the Coronavirus Large Business Interruption Loan Scheme (CLBILS) can still access the new scheme, provided that it is eligible and with total borrowing subject to a lender’s assessment of affordability.

In order to be eligible for a facility under the Recovery Loan Scheme, a company must meet certain eligibility criteria, including but not limited to:

Be able to self-certify that it has been impacted by Covid-19;
Be UK-based in its business activity and generate more than 50% of its turnover from trading activity (registered charities and further education establishments are exempt from this requirement);
Be engaged in trading activity in the UK at the time it draws down the facility;
Have a borrowing proposal which would be considered viable by the lender. In making their assessment, lenders may, but are not required to, disregard any concerns over a business’s short-to-medium term business performance due to the uncertainty and impact of Covid-19; and
Not be in collective insolvency proceedings. If the applicant is in scope of the Northern Ireland Protocol then (i) for micro and small enterprises the business was not subject to collective insolvency proceedings or in receipt of rescue aid; or (ii) for other businesses that are not micro and small enterprises they are not an “undertaking in difficulty”, as defined by the EU.
A business cannot be a bank/ building society; an insurer or reinsurer (can be an insurance broker); a public-sector body; a state funded primary or secondary school; or an individual other than a sole trader or a partner acting on behalf of a partnership.

If a lender can offer finance on normal commercial terms without the need to make use of the scheme, they may do so.

How do I apply?
Contact IQFinance