Kingsway Finance has received formal accreditation from the British Business Bank, as an approved lender for the Government backed Recovery Loan Scheme (RLS).
The Coronavirus pandemic has put an increased strain on the cash reserves of SMEs across the UK. As an accredited lender for the Recovery Loan Scheme we will have more funding options available to help clients old and new navigate their way forward.
Kingsway Finance will be offering term loan RLS funding from £25,001 to £250,000 for Professions Loans and £25,001 to £150,000 for Commercial Loans over two to five years, with no personal guarantees required.
Upfront fees of 1% will be applicable.
The scheme is designed to appeal to businesses that can afford to take out additional finance, providing them with continued support as they steer a path towards a sustainable recovery. Funds can be used for business purposes including managing cashflow, investment and growth.
We will be offering these new facilities to a panel of selected brokers, who will be contacted directly by a member of our team.
All applications for a Recovery Loan Scheme facility from Kingsway Finance must be submitted via referrals from partner brokers.
Key benefits of the Recovery Loan Scheme include:
- No guarantees for facilities under £250k: personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
- Guarantee to the lender: the scheme provides the lender with a government-backed guarantee against the outstanding facility balance. The borrower always remains 100% liable for the debt. Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
- No turnover limit: there are no turnover restrictions for businesses accessing the scheme.
Businesses that have taken out a BBLS, CBILS or CLBILS 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.
Is your business eligible for a Recovery Loan Scheme facility?
If your business fits the following criteria, you could be eligible to apply for RLS funding from Kingsway Finance:
- A viable operation, or one that would be viable were it not for the pandemic.
- Affected by the Coronavirus pandemic.
- Trading in England and Wales.
- Not part of collective insolvency proceedings.
Proposals submitted to Kingsway Finance will also need to comply with the stipulations of our standard credit policy.
You will not be able to apply if your business is:
- A bank, building society, insurer or reinsurer (but insurance brokers can apply).
- A public-sector body.
- A state funded primary or secondary school.
All applications for RLS funding from Kingsway must be submitted (via referrals from partner brokers) prior to 31st December 2021.
About the Recovery Loan Scheme
The Recovery Loan Scheme (RLS) launched on 6 April 2021 and 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.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.
At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022.
From 1 January 2022, the following changes will come into force:
- The scheme will only be open to small and medium sized enterprises (turnover <£45m).
- The maximum amount of finance available will by £2 million per business (maximum amount per Group limited to £6m).
- The guarantee coverage that the government will provide to lenders will provide to lenders will be reduced to 70%.
- These changes will apply to all offers made from 1 January 2022.
Scheme features include:
- Up to £10m facility per business: the maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts.
- Term length: term loans and asset finance facilities are available from three months, for up to six years, with overdrafts and invoice finance available from three months for up to three 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 the 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: personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 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 the business assets have been applied. No personal guarantees can be held over Principal Private Residences.
- 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.
Lenders will be required to undertake credit and fraud checks for all applicants. The checks and approach may vary between lenders.
There is no turnover restriction for businesses accessing the scheme.
Detailed information on RLS can be found on the British Business Bank website.
Business Finance Support
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: https://www.british-business-bank.co.uk/finance-hub/.
The Recovery Loan Scheme (RLS) is managed by the British Business Bank on behalf of, and with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy (BEIS). British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on RLS and the list of participating RLS lenders can be found on the British Business Bank website at: https://www.british-business-bank.co.uk/recovery-loan-scheme/.