Recovery Loan Scheme: A quick look

In March 2020, the first COVID-19 lockdown signalled the start of a difficult period for many businesses in the UK. With people advised to stay and work from home for long periods, many enterprises have lost large chunks of revenue.

In response to these challenging conditions, the Government launched the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), and Bounce Back Loan Scheme (BBLS). Each of these schemes was overseen by the British Business Bank (BBB) and provided essential financial support to businesses that needed extra help during the pandemic.

Now, as we enter what is, hopefully, the end of the crisis, these initiatives are no longer open to new applications and the new Recovery Loan Scheme (RLS) has been launched to offer further support. In May, Atom bank was accredited by the BBB as a lender for the new Scheme, allowing us to continue helping companies get back on their feet.

With applications open from 1st June, we thought it would be a good idea to provide you with a quick look at RLS and what it could offer your customers. Read on to find out more.

What is RLS?

The Recovery Loan Scheme is a new initiative that will offer support to companies in the wake of the coronavirus pandemic. The finance taken out through the Scheme are backed by the UK Government and can be used for a variety of business purposes, such as growth, investment, or cash flow.

The BBB has accredited a number of lenders to deliver loans to businesses. Atom is one of these approved providers. The Scheme had its launch on 6th April and will run through to the 31st December 2021, subject to review.

What can RLS offer my customers?

RLS can offer your customers access to essential business finance to help them get up and running again after COVID-19. By applying through Atom, they could access a secured business loan of between £250,000 and £5 million (subject to our commercial lending policy) over a term of up to six years.

Please note: We are only offering secured term loans as a part of RLS, but other forms of finance are available elsewhere, such as overdrafts, asset finance, and invoice finance. You can find out more about what’s available from where from the BBB. The interest and fees associated with any RLS facility are to be paid by the borrower from the outset.

Which businesses are eligible?

If any of your customers wish to apply for an RLS loan through Atom bank, you need to be sure that they will meet the eligibility criteria. The business must:

• Be trading in the UK
• Be able to self-certify you were affected by COVID-19
• Be able to provide security for the loan and present a viable borrowing proposal when you apply (in line with Atom’s commercial policy)
• Be willing to undergo credit and fraud checks
• Generate 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 be subject to any relevant insolvency proceedings or collective insolvency procedure under national law.

Please note: We cannot accept applications if the business is a bank, building society, insurer, reinsurer, public sector body, or a state-funded primary/secondary school. If your client is an insurance broker, they are allowed to apply.

We are also accepting applications from businesses that have already received financial assistance from the Government (provided the above criteria are met). New and existing Atom bank customers are also welcome to apply.

What are the differences between RLS and CBILS?

We have previously offered businesses access to CBILS, which was one of the schemes withdrawn recently that was also Government-backed. RLS is intended as a replacement for CBILS, so it’s worth knowing that, while similar in many respects, there are differences. You can see a quick summary of how the two differ below.

Please note: These comparisons are based on CBILS and RLS as offered by Atom. CBILS is no longer open to new applications as of 31st March 2021.

Feature	RLS	CBILS
Loan amount	£250,000 to £5 million	£100,000 to £5 million
Loan term	2–6 years	2–6 years
Does the Government cover the first 12 months’ interest?	No	Yes
Does the Government cover the upfront lender’s fee?	No	Yes
Maximum annual turnover	No maximum limit	£45 million

How can I apply on behalf of my customers?

To apply for RLS for a customer, you will need to be registered with us as an intermediary and have completed your RLS training — you can find more details on our RLS hub.

You can also speak to your RBDM, or, alternatively, contact our TBDM team via businesssupport@digitalmortgages.net or 0333 399 0060, Monday to Friday, 9am to 5pm.