Press Release by the British Business Bank

Press Release by the British Business Bank

Further details of a new iteration of the Recovery Loan Scheme, designed to support access to finance for UK businesses as they look to invest and grow, are published today.

Participating lenders will be listed on the British Business Bank website once they are open for applications.

The scheme will support facility sizes of up to £2m for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m for those in scope of the Northern Ireland Protocol¹.

The British Business Bank will administer the scheme on behalf of the of the Secretary of State for BEIS. The Recovery Loan Scheme has so far offered over £4.5bn of finance to almost 20,000 businesses².

Scheme features

The Recovery Loan Scheme aims to improve the terms on offer to borrowers. If a lender can offer a commercial loan on better terms, they will do so.

Key features include:

  • Up to £2m facility per business group: The maximum amount of a facility provided under the scheme is £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers³. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • Wide range of products: Businesses can continue to choose from term loans, overdrafts, asset finance and invoice finance. Not all lenders will be able to offer all products.
  • Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years.
  • Access to multiple schemes: Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022.
  • Pricing: The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.
  • Personal Guarantees: Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the Scheme.
  • Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
  • Decision-making delegated to the lender: Recovery Loan Scheme-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.

Eligibility criteria include:

  • Turnover limit: The scheme will be open to smaller businesses with a turnover of up to £45m.
  • UK-based: The borrower must be carrying out trading activity in the UK.
  • No Covid-19 impact test required: Unlike the previous iteration of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19.
  • 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.
  • Business in difficulty: The borrower must not be a business in difficulty, including not being in collective insolvency proceedings.

The Recovery Loan Scheme will be available through participating lenders, which will be listed on the British Business Bank website once they open for applications.

How much can you borrow? Click below to find out.

ENDS

¹ Borrowers in scope of the Northern Ireland Protocol  may borrow up to £1m unless such borrower operates in a sector where aid limits are reduced, in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries / aquaculture and road haulage.

² 19,908 businesses at 12 July 2022

³ Borrowers in scope of the Northern Ireland Protocol  may borrow up to £1m unless such borrower operates in a sector where aid limits are reduced, in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries / aquaculture and road haulage.

 For charities and Further Education colleges, confirmation of Covid-19 impact will still be required in some instances

Bounce Back Loan Scheme (BBLS)

Bounce Back Loan Scheme (BBLS)

As of the 4th May 2020, the new government backed loan scheme was launched to assist UK businesses that were struggling to obtain funding under the existing CBILS scheme.

The facility is designed to offer the lenders a 100% guarantee from the UK Government which then allows the lenders to reduce the credit checks needed to advance funds to those most in need of these loan funds.

The scheme offers loans from £2,000 to £50,000 and is based on a 6 years loan term with the first year being payment free (that is no interest of capital repayments until month 13). The government pay the lender the first year’s interest due as well as the lender arrangement fees.  The fixed rate of interest rate has been set by the Chancellor of the Exchequer at 2.5% APR.

The facility is initially only being offered through the High Street banks and so does not allow us to act for clients in making the application. The process is deliberately straightforward and includes several declarations, that are certified by the applicant, as the method of quickly producing the acceptance by the bank.

We do however remain committed to securing fast track acceptances through the CBILS portal which can be found here – CBILS Application Portal

 

To assist our clients and website users there is a handy reference chart below with direct links to the lender’s application pages.

NatWest Apply Now
Lloyds bank Apply Now
Santander Apply Now
Barclays Directly apply though the online business banking app
Clydesdale bank Apply Now
HSBC Apply Now
Bank of Scotland Apply Now
TSB Bank Apply Now

As the list expands, we will update this page and if we are asked to assist our clients in delivering this scheme in the future, we will provide a link to our own application portal.

If for some reason you are not able to secure a BBLS for your business, please contact us or complete a CBILS application to see if that is a better route for your business.

The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of the Secretary of State for Business, Energy and industrial Strategy (BEIS). Full details on CBILS and the list of participating CBILS Lenders can be found on the British Business Bank website here.