Today the British Business Bank has named the first five lenders to be accredited under the Recovery Loan Scheme (RLS).
The lenders announced are Bank of Scotland, Coventry & Warwickshire Reinvestment Trust, Lloyds Bank, NatWest and Royal Bank of Scotland.
What do we know about the new scheme so far?
The new iteration of the RLS will support facility sizes up to £2million for borrowers outside of the Northern Ireland Protocol and £1million for those within.
It will be available on a range of products including term loans, overdraft asset finance and invoice finance. The minimum value will depend on product (£1,000 for asset finance and invoice finance, £25,001 for overdrafts and term loans).
Businesses that took out another government supported loan (such as bounce back, CBILS or previous RLS) will still be eligible for the new scheme.
The government will provide lenders with a 70% guarantee which will be available after the lender has completed it’s normal recovery process – if a personal guarantee is required (which in many cases it will be) this security will be called upon before the government guarantee.
Whilst this represents a further watering down of support from the government for small businesses our hope is that it will allow lenders to offer credit with additional certainty where they might struggle otherwise.
We look forward to seeing more alternative lenders gain accreditation to increase the range of support available.
If you would like to know more about the scheme as it becomes available, please email toby@startpointfinance.co.uk