The Lloyds Recovery Loan Scheme (RLS) is a loan scheme by the government to help finance small and large UK business owners affected by the pandemic.
The loan can be used for any legitimate business purpose (e.g. managing cash flow, investment and business growth). On this blog, I will talk about applying a Recovery Loan Scheme with Lloyds. I want to be clear, these loans are not to buy fancy Macbook’s, brand new vehicles etc. They are to help your business recovery after the pandemic.
What About Bounce Back Loans (BBL) and Coronavirus Business Interruption Loan (CBIL) Schemes?
They finish 31st March 2021, they were a lifeline to thousands of businesses in the UK. Funding was quick and fast with the Bounce Back and CBILS schemes and we hope this new scheme will be similar.
The Recovery Loan Scheme is set to take over with loans from £25,000 up to £10 million from early April until December 31st 2021.
If you’re wondering what’s more in a Recovery Loan Scheme, click here for my previous blog about it.
How Long Does The Recovery Loan Scheme Running For?
The scheme will run from early April until December 31st 2021 at which point they will evaluate if it needs to continue.
These loans are for 6 years giving you plenty of time to get your business back on track. For extensions to overdrafts and invoice financing the time is 3 years.
Can I Apply For The Recovery Loan Scheme?
Businesses from any sector can apply. You’re eligible for a Recovery Loan if your business:
- is currently trading in the UK.
- is viable or would be viable were it not for the pandemic.
- has been negatively affected by the coronavirus pandemic.
You aren’t eligible if your business is:
- in ‘collective insolvency proceedings’.
- a bank, insurer or reinsurer (but insurance brokers are eligible).
- a public-sector body.
- a state-funded primary or secondary school
Is there a credit check to get a Recovery Loan?
All applicants for government Recovery Loans will be credit-checked by lenders. Lenders also have to carry out fraud checks. This does mean the recovery loan scheme will be a bit harder to get than a bounce back loan.
Bounce Back Loans were 100% guaranteed by the Government meaning it was a safe bet for the bank. These loans are 80% backed by the Government which takes most of the risk away from the bank but not all of it.
You may check the British Bank‘s Website for further information.
Now, let’s talk about Lloyds and the recovery loads scheme.
Applying A Recovery Loan With Lloyds
Who should be applying for a recovery loan scheme loan with Lloyds Bank?
People that should be applying for the recovery loan scheme with Lloyds are people that are banking with them already.
Its a lot faster to apply with the bank you already use, so if you bank with Lloyds go with them. They already have your history so it will be so much faster.
If you don’t have a Lloyds account then you might want to find out who is processing loans the fastest as the time you need it. What happens with these schemes is they get flooded with applications. This means they get really slow processing new clients which can be really frustrating.
The Recovery Loan Scheme (RLS) is more similar to the Coronavirus Business Interruption Loan Scheme (CIBLS). You’re gonna need to make sure that you’ve got things organised before you apply with Lloyds.
What To Prepare Before Applying For The Recovery Loan Scheme:
- All filing and accounts needs to be up to date. You need to sort everything out on Companies House and HM Revenue and Customs .
Make sure that you’ve got that in place, then you’ve got those accounts, and you can then apply with your bank. Now, if you’re applying with Lloyds, they’re going to look at a few things.
Conditions Of Getting A Recovery Loan Scheme:
- Be viable or would be viable were it not for the pandemic
- Have been impacted by the coronavirus pandemic (which is most businesses)
- Not be in insolvency proceedings
NOTE: If you don’t get this stuff together, then you’re going to get declined for these loans. So spend the time sorting this prior to applying and it will make your chances of receiving the loan much more likely.
Now, these recovery loan scheme loans, and I’ve made a ton of content all about them. Check out my in-depth blog post on everything you need to know about The Recovery Loan Scheme here.