Let me share with you everything I know about The Recovery Loan Scheme With RBS.
I know why you’re here because you want to know about applying for a Recovery Loan Scheme loan with Royal Bank of Scotland (RBS). There are a few things we need to cover prior to your applying.
What is the Recovery Loan Scheme (RLS)?
Now, let’s talk about the recovery loan scheme. What is it?
You probably have seen that the government had some incredible schemes that just finished. Those two schemes were, the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBL).
Coronavirus Business Interruption Loan Scheme
The CBILS scheme allowed you to borrow from £25,000 to millions of pounds. This scheme was for Medium and Large businesses to keep them trading during the pandemic.
Bounce Back Loan Scheme
The Bounce Back Loan Scheme was the more popular scheme. You could borrow from £2,000 to £50,o00 really fast, the scheme was designed to keep businesses alive during these uncertain times.
What made them incredible was some businesses got them in hours. Even if their business was insolvent and losing money they could still borrow which has never happened before.
The reason the money came fast was that it was backed 100% by the Government. This took away all the risk from the Bank meaning they could focus on getting loans to people fast.
What Is The Recovery Loan Scheme?
The Bounce Back Loan and CBILS both finished at the end of March. They are replaced with The Recovery Loan Scheme, which launched on the 6th of April 2021.
The RLS aims to help businesses affected by the pandemic and can be used for business purposes, including (1) managing cash flow, (2) investment and (3) growth. It is designed to support businesses that can afford to take out additional finance for these purposes.
One thing that is different compared to the previous schemes is the guarantee by the government. The previous Bounce Back Loan Scheme had a 100% guarantee, this scheme is 80%. Thats great but its a little more risky for the bank, they are liable for 20% of the loan this time round.
What that means is they will be more selective on who they lend money to. So prior to applying for The Recovery Loan Scheme you will need to get some stuff in order which I will cover in this post.
Applying a Recovery Loan Scheme (RLS) with RBS
Prior to applying with RBS here are some important things we must have in good standing.
First, what you need to do is get everything organised in your business.
Go do a Companies House check, have you filed your annual return are your accounts up to date. If they’re not, I would recommend prior to even applying that you get that stuff sorted that you get things in place. So you are able to sail through the application process.
If you don’t know if these are up to date, speak with your accountant they will be able to tell you pretty quickly.
Second, improve your credit rating.
All the lenders on this scheme will do a credit check on you during the application process for the loan. So rather than let them find stuff wrong with your credit rating, check your rating yourself.
See what your score is and work on improving it if needed prior to applying. If you are behind on bills then get a payment plan agreed and start making regular payments. That will improve your score pretty quickly and make a big difference during your application.
If you have a CCJ County Court Judgement, my advice is you reach out to whoever issued it and pay what you owe. It will stay on your credit score for 5 years, however if it shows as settled it greatly improves your score.
NOTE: the good news is, if you had a bounce back load already, you can get a recovery loan scheme loan. So that means you will be to get a second loan now.
Who should be applying with RBS?
The first people that should be applying are people that already have an account with the RBS. That means you’ve already got a relationship, got an account, got paperwork on file, and your business history.
Its going to be much faster for you to get a loan with RBS as half of the work is opening an account.
I’ve noticed that there are less providers than the were with the BBL at this point in time. So if your bank doesn’t offer The Recovery Loan Scheme, then you should be looking to apply and open an account with RBS.
The first step is to open an account with RBS, once you have the Business account you can then apply for the loan.
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