Recovery Loan Scheme

We will be working with all the providers under the new scheme and will update this page when there is more information

The Recovery Loan Scheme is the government scheme to help UK businesses affected by coronavirus to access finance. Finance can be used for any legitimate business purpose, such as managing cash flow, investment and growth. It is designed for businesses that can afford to take out additional finance for these purposes, Wattsford Commercial Finance is working with clients wishing to access the scheme for when provides start to take applications

Will my business be eligible for a Recovery Loan?

You will be able to apply for a Recovery loan if your business is trading in the UK.

You will need to be able to show that your business:

  • is viable or would be viable were it not for the pandemic
  • has been impacted by the coronavirus pandemic
  • is not in collective insolvency proceedings — details on this will be published by the Government in due course

What can the Recovery Loan be used for?

  • Access cash flow
  • Grow your business
  • Purchase equipment
  • Pay a one-off cost
  • Help with payroll
  • Invest in marketing

Details of the Recovery Loans Scheme

  • Up to £10m facility per business:  The maximum value of a facility provided under the scheme will be £10m per business (maximum of £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • Turnover limit: There will be no turnover restriction for businesses accessing the scheme.
  • Wide range of products: Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities (subject to the lender being accredited for each of these finance types).
  • 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.
  • Interest and fees to be paid by the business from the outset: Businesses will be required to meet the costs of interest payments and any fees associated with the facility.
  • Access to multiple schemes: Businesses who have taken out a CBILS, CLBILS or BBLS facility will be able to access the new scheme, although the maximum they are allowed to borrow will depend on their lender’s assessment and scheme requirements.
  • Pricing: The annual effective rate of interest and upfront and other fees cannot be more than 14.99%.
  • 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.

Eligibility

  • 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 (at the lender’s discretion) 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 are 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.

PLEASE NOTE: The Business Recovery Loan Scheme-backed facilities are provided at the discretion of the lender.

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