In this article, we cover all the details you will need to know if you are seeking additional funds for your business under the BRL scheme.
As part of Rishi Sunak’s Chancellor's Budget, it was announced that a new loan scheme was to be introduced; a scheme that would replace the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS); both of which were designed to help businesses impacted by Covid-19 to navigate themselves through lockdown.
The new scheme, entitled the Business Recovery Loan (RLS), is now open for applications and will run until 31st December 2021, subject to review. The UK Government has dedicated a funding pot of £75bn to support businesses under BRL.
In short, the scheme permits businesses to borrow up to £10m as one of the following facilities:
The Chancellor of the Exchequer, Rishi Sunak, said:
“We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and as the situation has evolved we have ensured that our support continues to meet businesses needs.
As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.”
In this article, we cover all the details you will need to know if you are seeking additional funds for your business under BRL.
According to the Chancellor, the funds dedicated to BRL will facilitate loans from £25,000 up to £10m for businesses and £30m for a ‘business group’. Invoice and asset finance is available from £1,000.
Borrowers will need to demonstrate what the funds are to be used for. Legitimate reasons for lending include stabilising and managing cash flow, making sound investments and other expenses associated with growth, development and job retention. Businesses utilising this funding option will enjoy favourable interest rates and fees when compared to existing loan options, with rates being no more than 14.99% annually.
If your business has already made use of funds available through CBILS, CLBILS or BBLS, you can still raise finance via BRL. But, it is worth noting that the amount in which your business can lend will be impacted by previous payments received.
Personal guarantees are only required for facilities above £250,000.
Think you have to be a big company with a sizable turnover to access these funds? Think again! Unlike many loan products, there is no turnover restriction for businesses looking to access funds from this scheme.
All lenders will undertake standard credit, fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks as part of the BRL application process.
If you are looking to raise finance and wish to explore your RLS options, we at Lime Advisory would be more than happy to aid you through the application process, ensuring you have all the relevant information and documentation required. This includes management accounts, an up-to-date business plan, historic accounts, details of assets and so on.