If you’ve come across this blog, then you want to know about The Recovery Loan Scheme (RLS) with NatWest bank. Keep reading, because I’m going to share with you exactly who can apply for a Recovery Loan scheme with NatWest.
What is the recovery loan scheme (RLS)
Not everybody really understands fully what it is and how it can help them, so first let’s cover that. The recovery loan scheme launched on the 6th of April 2021.
The RLS is to replace the bounce back loan scheme (BBL), and the coronavirus business interruption loan scheme (CBILS).
The Recovery Loan Scheme ensures businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes closed in March 2021.
The scheme provides support to help businesses recover and grow following the disruption of the pandemic over the last 18 months.
What is the difference between the new Recovery Loan Scheme versus the BBL and CBILS?
The difference between a bounce back loan and the recovery loans game is a bounce back loan was guaranteed 100% by the government.
If you took a bounce back loan, and for some reason you could not pay it back, the government would step in and pay the bank 100% of the money. That meant no risk to the bank.
It was very easy for them to loan money because they knew that they were either going to get paid by you, or pay back by the government. That was a win win for everyone as the loans sole purpose was to keep businesses alive.
The Recovery Loan Scheme is not quite as generous but its still pretty good.
The key difference is that the government is still going to back the loan but only to 80% meaning the risk there for the bank is 20%.
What that means is banks are going to be more strict when they’re loaning out money. They’re going to look if your business is viable, going forward.
You don’t need to be profitable right now, but they have to see a path that your business can take to make profit in the future.
Due to that you need to do some preparation prior to applying for the loan.
Pro TIP: Make sure all your accounts are up to date, everything’s hunky dory, with Companies House, and all of that stuff is in place before you apply.
Who can I apply for NatWest Recovery Loan Scheme?
The people that should be applying with NatWest are two different group.
(1) If you’ve already got an account with NatWest, you should apply because that’s going to be significantly easier for you since they’ve got a history with you. You’ve already done the ID checks and all that sort of stuff.
(2) The other option is maybe you bank that does not offer The Recovery Loan Scheme. Some banks just did not apply to be an accredited lender, if your bank is not lending Natwest could be a great option for you to try.
Who shouldn’t be applying with NatWest?
NatWest is a good option but they’re not the best option.
With the bounce back loans there were better banks than Natwest. For example Starling Bank and Metro Bank were very good so they could be an option for you to look at.
If for some reason, they’re not any good, then go and look at NatWest afterwards.
What If I Have Had A Bounce Back Loan Already
You might think if you already took a bounce back loan then these scheme would pass you over. Well I have some good news, if you already took a Bounce Back Loan you can apply for The Recovery Loan Scheme.
That’s because Bounce Back Loans were to help keep you alive, these loans are to get your business back on track and to recover.
In conclusion
I think this scheme is another great scheme being offered by the government during these uncertain times. I fully intend to apply for The Recovery Loan Scheme and sit on the money.
Its a chance for you to build a war chest at a very low interest rate to spend on opportunities that arise in the coming months and years.
Ive got a more detailed blog post on the scheme here https://james-nicholson.co.uk/recovery-loan-scheme/
