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The Recovery Loan Scheme (RLS) supports access to finance for UK businesses as they recover and grow following the COVID-19 pandemic.

RLS aims to help businesses affected by COVID-19 and can be used for business purposes, including, managing cashflow, investment and growth. It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme. The Scheme will run until 31 December 2021, subject to review. Further information can also be found on the British Business Bank website.

British Business Bank logo

The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.

Key Features

Loan size
The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Please note, the minimum loan size OakNorth Bank offers is £500,000.

Type of loan
OakNorth Bank offers term loans. If you require an overdraft, invoice finance or asset finance, please visit the British Business Bank website and apply for this with another accredited lender on the scheme.

Flexible terms available
Spread repayments of your loan over up to six years

Interest and fees to be paid by the borrower from the outset
Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.

Access to multiple COVID-19 schemes
Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access this new scheme although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS. 

Personal Guarantees
As we provide loans of a minimum of £500,000, a personal guarantee may be requested. However, the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied.
Additionally, a borrowers/guarantors’ Principal Private Residence (PPR) cannot be taken as security to support a Personal Guarantee or as security for an RLS-backed facility.

Guarantee to the Lender
The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.

Eligibility Criteria:

The eligibility criteria specified by the British Business Bank states that this scheme is open to businesses that:

  • Are UK based businesses
  • Have a business plan which, were it not for the current pandemic, would be considered viable by the lender
  • Can self-certify that it has been impacted by the Coronavirus

The following businesses are not eligible: Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers), Public sector bodies, State funded primary and secondary schools

Other details:

  • There is no turnover restriction for businesses accessing the scheme.
  • OakNorth Bank will be required to undertake credit, financial crime and fraud checks for all applicants. Our checks and approach may differ to that of other lenders.
  • Security will be requested, and a personal guarantee may be requested, but cannot exceed 20% of losses after all other recoveries have been applied.
  • Please note that individual lenders may also have their own additional criteria for eligibility. At OakNorth Bank, the minimum sum we accept for RLS loan applications is £500,000 which is in line with the loan size we do with our normal commercial loans.
  • Lender and Borrower are still free to enter into loan agreements outside of RLS e.g. where there is no economic benefit to the borrower of taking out a RLS loan over normal commercial lending.

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. This page is regularly reviewed and updated and has a wide range of in-depth information about the scheme.

FAQs that are specifically relevant to OakNorth Bank’s RLS participation can be found below.

What happens if I default?

Where defaults occur, we follow our standard commercial recovery procedures, including the realisation of security, before we make a claim against the government’s 80% guarantee.

Are all sectors eligible?

There are some sectors that are not eligible:

  • Banks, Building Societies
  • Insurers and Reinsurers (excluding Insurance Brokers)
  • Public sector bodies
  • State funded primary and secondary schools

Why isn’t OakNorth Bank offering asset finance, invoice finance, or overdrafts?

We have never offered asset finance, invoice finance, or overdrafts. Instead, we have focused on offering term loans which start at £500,000. In order to best support businesses through this challenging period and ensure we’re able to conduct the correct level of credit analysis, we are focusing on the loan size we do with normal commercial loans – which typically doesn’t fall below £500,000.

My business was under pressure before the COVID-19 crisis – am I still eligible for RLS?

You can still be considered for a loan under the scheme, though these are subject to business viability and you must meet the full eligibility criteria to be approved.

What security do I need to provide?

A debenture giving legal charge over all the assets in the business.

Does a personal guarantee need to be provided?

As we provide loans of a minimum of £500,000, a personal guarantee may be requested. However, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.

Additionally, a borrowers/guarantors’ Principal Private Residence (PPR) cannot be taken as security to support a Personal Guarantee or as security for an RLS-backed facility.

Can I refinance a loan into RLS?

Possibly – under very specific circumstances. Please get in touch with our team so we can discuss it directly with you.

What kind of interest rates will businesses need to pay?

The interest rate on your loan that would have been agreed and communicated to you at the outset. You are required to meet the costs of interest payments and any fees associated with the RLS facility.

What do I do if my RLS application is unsuccessful?

There are several government support measures for businesses such as grants which you may be eligible for. Further information on these initiatives is available on gov.uk.

Application Form

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