Recovery Loan Scheme (RLS)

Businesses may choose to consider approaching other accredited lenders if they are unable to access the finance they need via Shire Leasing.

• Up to £2m facility per business: The maximum amount of a facility provided under the scheme is £2m per business for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  A borrower in scope of the Northern Ireland Protocol may borrow up to £1m per business group, 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 freight haulage.
• 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.
• 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.
• Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow.
  All borrowers in receipt of a subsidy from a publicly-funded programme should be provided with a written statement, confirming the level and type of aid received.
  Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive.
• Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.

• Working Capital
• Investment and growth
• Refinancing existing debt/debt consolidation

To be eligible for a business finance facility under RLS, you must meet the following eligibility criteria:

• Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).
• UK-based: The borrower must be carrying out trading activity in the UK.
• No Covid-19 impact test required: Unlike with the previous phases of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19. For charities and Further Education colleges, confirmation of Covid-19 impact will still be required in some instances.
• 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 relevant insolvency proceedings.
• Purpose: the facility must be used to support trading in the UK and cannot be used to support certain export related activities. There are certain restrictions on the use of proceeds of facilities in the agriculture, fisheries and aquiculture, and road freight transport sectors for borrowers impacted by the Northern Ireland Protocol.

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.

Shire Leasing’s Hire Purchase and Sale and Hire Purchase Back eligibility:

• Where the balanced financed is between £15,000 and £25,000, only non-regulated customers will qualify for Hire Purchase and Sale and Hire Purchase Back solutions with Shire Leasing.
• Regulated customers (ie Sole traders, partnerships up to 3 and unincorporated associations) will only qualify for these asset finance solutions with Shire Leasing if the total balance financed exceeds £25,001.

Before making an application, you should check that you meet the eligibility criteria of RLS and have reviewed what different lenders can offer.

It may be useful to prepare the following in advance, to help us to speed up the application.

• The amount you would like to borrow
• What the money is for —  so we can check that it’s a suitable business purpose and the right type of finance for your needs
• The period over which you would like to make the repayments

You will need to provide certain documents when you apply for an RLS-backed facility. These are likely to include:

• Management accounts
• A business plan
• Historic accounts
• Details of assets

Decision-making on whether a business is eligible for RLS is fully delegated to the British Business Bank’s accredited RLS lenders.

The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.

For more information directly from the British Business Bank, please visit the British Business Bank’s website.