Recovery Loan Scheme (RLS) Phase 2
Applications for this scheme have now closed.
The Recovery Loan Scheme (RLS) launched on 6 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 RLS Phase 2 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, with changes applying to all offers made from the 1 January 2022.
Scheme features include:
- Up to £2m facility per business: The maximum amount of a facility provided under the scheme is £2m per businesses (maximum £6m per group). Minimum facility sizes starting at £25,001 for term loans.
- Term length: Term loan facilities are available from three months, for up to six 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 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.
Eligibility Criteria:
- 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 as they would for commercial facilities. The checks and approach may vary between lenders.
Turnover limit: Businesses with a turnover not exceeding £45m per annum.
Please note: 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.
Important Information:
The maximum amount you can borrow (limited to the smaller amount):
- 2 x Annual wage bill as evidenced by 2019 accounts. Where the case of wage undertakings created on or after 1 January 2019, the maximum loan must not exceed the estimated annual wage bill for the first two years in operation
- 25% of 2019 turnover as evidenced by 2019 accounts
- Estimation of Working Capital/Investment costs required for the forthcoming 18 months. Note, if your business employs over 250 employees, then this is only required for the forthcoming 12 months
- Subject to a maximum of £2m per business (max £6m per group)
You will need to have a sound business proposition and be viable (notwithstanding short-to-medium term to business performance due to uncertainty & disruption caused by coronavirus)
Whether we provide credit depends on your circumstances and we may ask you to provide Business Plan or additional financial information to support an application
You must be over 18 to apply and there are lending terms and conditions (maximum lending applies to Group and you may need to provide security)
Business Finance Support
The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cash flow and a list of independent advice services. Visit : british-business-bank.co.uk/finance-hub 
RLS is delivered by the British Business Bank, through Danske Bank as an accredited lender.
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. Visit british-business-bank.co.uk .
The provision of the RLS guarantee does not imply any endorsement or warranty of Danske Bank from the Secretary of State for Business, Energy and Industrial Strategy or the UK Government.
