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Recovery Loan Scheme: Tips for putting together applications

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Jonathan Smith28 July 2021
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Recovery Loan Scheme: Tips for putting together applications

The past year has been hard for a lot of businesses. COVID-19 is still posing challenges, and many are still in need of a helping hand.

To try and address this issue, the new Recovery Loan Scheme (RLS) has been created to give businesses that extra boost. It is the successor to CBILS, CLBILS, and BBLS, and offers further Government-backed financial assistance. The British Business Bank (BBB) has been tasked with overseeing RLS, and they have accredited lenders, including Atom bank, to offer loans and other products.

Here at Atom, we can offer secured business loans of between £250,000 and £5 million (subject to our commercial lending policy) with commitment periods of up to six years through RLS. Other types of finance are available through the scheme from other providers, including overdrafts, asset finance, and invoice finance — visit the British Business Bank for more details.

A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if we can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, we will do so. Wondering whether RLS might be suitable for your customers? We have a quick guide that is worth reading before you make a recommendation. If you do think it might be the right option, here are three essential tips for putting together an application.

Make sure that your customer is eligible

Firstly, you need to make sure that your customer is eligible to apply. The Recovery Loan Scheme is available to a wide range of businesses, from SMEs to larger enterprises. It’s also open to those who’ve previously received Government-backed financial assistance.

If you want to apply for RLS through Atom, ensure your customer is:

  • Trading in the UK
  • Able to self-certify they were affected by COVID-19
  • Able to provide security for the loan and present a viable borrowing proposal when they apply (in line with Atom’s commercial policy)
  • Able to satisfy our credit and fraud checks
  • Generating at least 50% of turnover from trading activity

Please note: as defined by the British Business Bank, trading activity for RLS is any trading or commercial activity that generates turnover. Rental income (as long as it is UK based) is classified as a service income and is acceptable for RLS.

Not subject to any relevant insolvency proceedings or collective insolvency procedure under national law RLS is not available to:

  • Banks;
  • Building societies;
  • Insurers (insurance brokers are eligible);
  • Reinsurers;
  • Public sector bodies;
  • State-funded primary/secondary schools.

Include as much detail as possible in the application

When you’re putting together an RLS application on behalf of a customer, you should aim to include lots of information about the business and how it was impacted by the pandemic. These extra details can help the lender understand exactly why your customer needs an RLS loan and what it will be used for.

Here at Atom, to allow our underwriters to make an informed decision, we need as much detail as possible in a customer’s application. This means you need to include as much information as you can when you apply through Portal Lite — we have a proposal summary form that you can use to include essential details (described in the next section).

Be sure to provide:

  • The purpose of the loan
  • A breakdown of company structure (if applicable)
  • Experience of key individuals
  • By including as much detail as possible, it ensures we can process the application swiftly, minimising the need for further information requests.

Ensure your customer’s paperwork is ready

When submitting a case for an RLS loan, you will need to ensure your customer has all the paperwork they need to support their application. It’s a good idea to speak with the business about this early on so that they have time to provide you with the necessary items.

If they apply through Atom they will need to provide:

  • RLS supplementary form — Important: this needs to be submitted along with their main application, or we won’t be able to proceed further — available here)
  • Proposal summary form — This form is not mandatory; however it is mandatory for you to provide a proposal summary as part of your application, so it’s a good place to do just that — available here)
  • Last two years complete accounts (including profit and loss)
  • Up to date management accounts and trading performance evidence (including profit and loss and aged debtors/creditors list)
  • Evidence of payroll costs and total turnover for 2019
  • A copy of their business plan or response to COVID-19

Please note: If the paperwork listed above is not complete and included, there may be delays in processing the application.

Ready to apply?

To apply on behalf of a customer, you’ll need to do so by logging into Portal Lite. You can also visit our Recovery Loan Scheme hub to get more information.