RLS Support

RLS Support

The Recovery Loan Scheme supports businesses with access to loans, overdrafts, invoice finance and asset finance facilities worth up to £10m and with repayment terms of up to six years.

Funding is available to support businesses experiencing liquidity constraints as a result of COVID-19 and borrowers will be required to evidence how funding packages will specifically be deployed to manage cashflow pressures.

Key eligibility criteria for the schemes include:

The British Business Bank operates the schemes via its accredited lenders. Across the Recovery Loan Scheme and previous initiatives including CILS and CLBILS, there are over 40 accredited lenders working to provide finance and they include high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders.

Spectrum is aware of non-accredited lenders that are currently considering accessing the scheme to support clients and thus we encourage businesses to check the current list on the British Business Bank website regularly.

Firms backed by private equity are able to be supported through both RLS on a standalone basis.

Recovery Loan Scheme

  • A lender can provide up to £10m in the form of term debt facilities, asset finance loans, invoice discounting or an overdraft facility (committed or uncommitted). The scheme provides the lender (not the borrower) with a government-backed partial guarantee against 80% of the outstanding facility balance (net of any recoveries).
  • The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). In this instance, private equity and venture capital linked businesses are disregarded for the purposes of defining a business group. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • Term debt facilities and asset finance loans must be structured with a maximum tenor of 6 years, whilst invoice discounting and overdraft arrangements can be up to 3 years.
  • The government will charge no arrangement fee itself. Facilities will be offered at commercial rates of interest, albeit lenders must demonstrate that their pricing takes into account the economic benefit provided by the government-backed partial guarantee. The annual effective rate of interest, upfront fee and other fees cannot be more than 14.99%.
  • The amount borrowed should not be greater than (i) double the borrower’s annual wage bill for the most recent year available, or (ii) 25% of the borrower’s total turnover for the most recent year available, or (iii) with appropriate justification and based on self-certification of the borrower, the amount may be increased to cover their liquidity needs for the next 18 months for SMEs (defined has having up to 250 employees) or the next 12 months for larger enterprises (with over 250 employees).
  • CBILS is primarily designed to be used to facilitate new lending, although can be used to a limited extent to refinance existing debt.
  • Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme, although the amount they have borrowed under an existing scheme may in certain circumstances limit the amount they may borrow under RLS.
  • Borrowers must be UK based and generate more than 50% of turnover from trading activities. There is no turnover restriction for businesses accessing the scheme. Businesses in most sectors are eligible to use the scheme, however, several excluded sectors do exist. Notable restricted sectors include: Insurers and reinsurers (but not insurance brokers), public-sector organisations, including state-funded primary and secondary schools, membership organisations (Employer, professional, religious or political) and trade unions. See the British Business Bank website for the most current sector exclusion guidance.
  • At the discretion of the lender, the scheme may be used for unsecured lending for facilities up to £250,000. In such circumstances the lender is prohibited from requesting a personal guarantee from the applicant. For facilities above £250,000, the lender must establish that the borrower is unable to provide security, before it uses RLS. Personal guarantees may be requested, however these will be capped at 20% of the outstanding value of the loan, as the government is providing the guarantee for the remaining 80% of the finance. Primary residential property cannot be taken as security under the scheme at any time.
  • Accredited lenders are required to attest that they would consider the lending proposal viable, were it not for the COVID-19 pandemic, and believe facilities will enable the business to trade out of any short-term to medium-term difficulty. Borrowers must not have exhausted state aid limits and adhere to EU ‘undertaking in difficulty’ test; noting the full EU ‘undertaking in difficulty’ test does not apply to micro or small businesses. Micro and small businesses are businesses that have fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet total.

Spectrum Support

Lenders, both accredited and non-accredited, are receiving a high volume of enquiries relating to accessing funding support and most have formulated house strategies in response to the rapid rise in funding needs. Businesses are able to access funds by approaching lenders directly and can find detailed information including frequently asked questions here.

To further assist in accessing funding our Debt Advisory team can work with you to secure the additional capital needed to navigate your business through this period.

Services provided include:

  • Navigating the lending landscape: Whilst all applications incorporate the common eligibility criteria as set out by the British Business Bank they can vary in terms of borrower information requirements, standardised facility terms and security requested. The Spectrum team can leverage its deep relationships and knowledge of the banking industry to provide clarity on how to best approach a lender.
  • Presenting your business to lenders: We can work with you to prepare a detailed, comprehensive and professional loan application, positioning your business to meet a lender’s approval requirements. Our team is highly experienced when advising clients on how to approach lenders both in terms of communicating strategies and producing high quality supporting materials, including detailed financing modelling.
  • Negotiating terms and security: Ensuring the agreed facility provides the flexibility for your business to manage through this time is pivotal. We can play a leading role in delivering a facility agreement that best suits your needs, covering bespoke repayment plans, security arrangements and lender controls.
  • Full process management: One of our key objectives is to allow business owners to prioritise and focus their time on managing their business through the crisis as well as assisting lenders in a timely and efficient review of the proposal.


For more information please contact a member of the Spectrum Debt Advisory team, alternatively email CBILS@spectrumcf.co.uk and we will be in contact to arrange a convenient time to discuss your particular circumstances.

Spectrum Corporate Finance was acquired by FRP Advisory Group plc in March 2021. Click here to visit the FRP website.