Upcoming changes to the Recovery Loan Scheme

The Recovery Loan Scheme (RLS) launched on 6 April 2021, and is designed to help businesses that have been impacted by COVID-19 to access loans of between £25,000 and £10 million. As a condition of the RLS, the UK Government offers lenders an 80% guarantee for applications, giving lenders confidence to provide financial support to UK businesses.

Businesses who have applied for the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) or Bounce Back Loan Scheme (BBLS) are still eligible to access the RLS, though in certain circumstances it could limit the amount they can borrow.

In the Autumn Budget 2021, the Chancellor announced that the RLS would be extended by 6 months to 30 June 2022, with the following changes coming into effect from 1 January 2022:

• The scheme will only be open to small and medium sized enterprises.
• The maximum amount of finance available will be £2 million per business.
• The guarantee coverage that the UK Government will provide to lenders will be reduced to 70%.

With more than 70 accredited lenders, you can find out more about how to apply for the RLS on the British Business Bank website.

If you would like to discuss your circumstances or clarify the support available to you, please contact your usual EQ contact or call one of our offices.