The Recovery Loan Scheme (RLS) launched on 6 April 2021. It gives access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
If you’re thinking about applying for one with Santander, then this blog is for you.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including, managing cash flow, investment and growth.
Thats a huge win, so if you took a Bounce Back Loan you are able to also apply for The Recovery Loan Scheme.
Lets talk about applying a Recovery Loan Scheme with Santander
What is a Recovery Loan Scheme (RLS)?
The recovery loan scheme is a new scheme that the government launched at the budget of 2021. It replaces two loans. The Bounce Back Loan Scheme (BBL) and Coronavirus Business Interruption Loan Scheme (CBILS).
During the difficult times that we’ve had recently, the government created a scheme called the bounce back loan scheme (BBL).
What BBL allowed you to do was to borrow between £2,000 and £50,000 to keep you trading and to keep you operating as a business.
The other scheme CBILS was for bigger businesses. You could borrow millions into your business.
Both of those schemes finished March 31 2021.
The replacement is the recovery loan scheme.
A few key differences that we need to discuss. So you really understand whether this is right for you before choosing to apply:
- RLS is backed up by the government by 80%. Compared the the BBL which was backed up by 100%. This means if you couldn’t pay back the loan and your business didn’t work out, the government would step in and pay the bank. The new scheme is harder to obtain since it’s only backed up by the government by 80% compared to the BBL that was backed up by 100%. However its a LOT easier than borrowing a normal business loan, so don’t let that put you off.
- The new scheme lets you borrow from £25,000 up to £2,000,000. Compared to the BBL you can only borrow £2,000 to £50,000. This is great news and shows the government are serious about supporting UK Business.
- This scheme is to help you get you back to normality meanwhile the BBL were to help keep you alive. You should be investing The Recover Loan on growing your business. By far the best investment would be on marketing your business and getting back on track.
PRO TIP: It is essential that you get all your paperwork sorted prior to applying. Get your accounts in order and everything organised before you go and apply for a recovery loan scheme.
Who should apply a Recovery Loan Scheme with Santander?
You should apply for a recovery loan with Santander if you currently bank with them. It’s going to be a lot quicker and faster since they already know your history, they know everything about you, and they’ve already got your account set up.
Second, people that had difficulties applying with their current bank or do not even have a bank at all. Banks were flooded with applications for these recovery loans, which made it very difficult to get sorted. Some are faster than others, so I would look at a few options and Santander is a great place to look.