Let me share with you everything you need to know about the Recovery Loan Scheme with HSBC.
The Recovery Loan Scheme (RLS) is a government scheme to help small to large UK businesses affected by the pandemic to access finance. The finance can be used for any legitimate business purpose, such as managing cash flow, investment and growth.
What Is The Recovery Loan Scheme?
The recovery loan scheme is a new scheme launched by the government in the March 2021 budget, it’s going to replace the Coronavirus Business Interruption Loan Scheme (CBILS), and the Bounce Back Loan Scheme (BBL) which both end on the 31st of March 2021.
I’ve done a detailed video, and blog post about everything you need to know about the Recovery Loan Scheme check it out here.
- Can I apply if I had a bounce back loan?
- Am I eligible for applying?
- What do I need to get sorted?
All those questions are answered in the above video.
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.
Term Length of The Recovery Loan Scheme
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.
Who can apply for the Recovery Loan Scheme?
A business owner can apply for the RLS loan under the following conditions:
- 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 are a Bank, Building Society, Insurance Company, Public Sector Body or a School you cannot apply for one of these loans.
Applying A Recovery Loan with HSBC
Who should be applying with HSBC?
People that should be applying for the recovery loan scheme with HSBC are people that already have an account with them.
HSBC should be your first call for the recovery loan scheme if you already have a business account with them. They know about your business already and you’ve got a relationship with them.
The Recovery Loan Scheme is guaranteed up to 80% by the government. If you borrow £1,000 pounds from HSBC, and for whatever reason your business doesn’t work out, the government is going to give HSBC £800.
HSBC and all other banks will be requiring to undertake credit and fraud checks for all applicants.
- They’re going to do things like check your credit rating which they didn’t do on bounce back loans.
- HSBC wants see up to date accounts.
- Get your annual statement and annual declarations up to date with Companies House.
Is the business viable going forward?
The way that they’re going to look at that historically. What’s your business been like? They can look at the history of that and you can share with them and say:
My business worked.
Made some money
I made turnover.
I got sales.
Rolling customers.
What do you think about the recovery loan scheme?
Let me know in the comments section!
