Details of a new iteration of the Recovery Loan Scheme to give UK businesses access to finance to help them grow have now been published. Key features include:

  • Up to £2m facility per business
  • Term loans, overdrafts, asset finance and invoice financing available.
  • Term length between three months and six years depending on facility taken
  • Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022
  • Annual effective rate of interest and upfront and other fees cannot be more than 14.99%
  • Personal guarantees can be taken at the lender’s discretion. Principal Private Residences cannot be taken as security within the Scheme.
  • 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.

Low take up of the first 2 interations of the loan are being blamed on high interest rates of up to 15 per cent, extensive checks on borrowers’ financial history and viability, and demands for personal guarantees. With very few changes to the last scheme will take up be any different this time round?