Recovery Loan Scheme - RLS
Available to new and existing customers
Businesses who have taken out previous Government-backed lending are eligible
Available for new purchases or refinancing debt
How we're supporting businesses
As we emerge from a difficult period, it's vital that businesses have the support they need to invest and grow.
We've been accredited by the British Business Bank to offer secured loans through the Recovery Loan Scheme (RLS). This means we can continue to help SMEs as they navigate the challenging times that lie ahead.
What is the Recovery Loan Scheme (RLS)?
The new iteration of the Recovery Loan Scheme launched in August 2022 and is designed to support access to finance for UK small businesses as they look to invest and grow.
RLS aims to improve the terms on offer to borrowers. If we can offer a commercial loan on better terms, we will do so.
Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022, although in some cases it may reduce the amount a business can borrow.
Recovery Loan Scheme-backed facilities are provided at our discretion. We are required to undertake standard credit and fraud checks for all applicants.
What does the Recovery Loan Scheme offer?
- Up to £2m loans: We offer secured business loans from a minimum of £250,000 to a maximum of £2m*, subject to our commercial lending policy.* Limit of £1m per business group for Northern Ireland Protocol borrowers with further sectoral restrictions. Information can be found in the RLS Lending Criteria..
- Up to six year loan term: We offer commitment periods up to six years.
- Open to new and existing customers: We accept applications from both new and existing customers.
- Interest options: Both variable and fixed rate loan products available.
- Multiple purposes: The loan can be used for business investment, to refinance existing debt from another lender, and for cash flow purposes.
- Personal guarantees: A personal guarantee may be required, at our discretion. Security cannot be taken over Principal Private Residences.
- Guarantee to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
- Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow.
- All borrowers in receipt of a subsidy from a publicly-funded programme should be provided with a written statement, confirming the level and type of aid received.
- Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive.
- Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.
Who is eligible for the Recovery Loan Scheme?
To be eligible for an RLS loan, your customer’s business must:
Be UK-based in its business activity and cannot be used to support certain export related activities**
Provide suitable security for a secured loan in line with our commercial lending policy
Have a borrowing proposal which Atom would consider viable in line with our commercial lending policy in place at time of application (we may disregard concerns over short-to-medium term performance due to the uncertainty and impact of Covid-19)
Be willing to undertake credit and fraud checks for all applicants
Not be a business in difficulty, including not being in any relevant insolvency proceedings
Be a small to medium sized enterprise with an annual turnover up to £45m (on a group basis, where part of a group)
Who is not eligible to apply?
Banks, building societies, insurers or reinsurers (excluding insurance brokers)
Public sector bodies
State funded primary or secondary schools.
** There are certain restrictions on agriculture, fisheries and aquiculture, and road freight transport sectors for borrowers impacted by the Northern Ireland Protocol
How do I apply?
To apply for a Recovery Loan Scheme loan with us, you will need to do so through Portal Lite.Register for Portal Lite
Before you can apply on behalf of a business, you will need to have completed our RLS broker training and returned the addendum to your agreement to us. If you need assistance with either of these steps, you can contact your RBDM.
To process your application on behalf of a business, we will need the following documentation:
- Atom RLS supplementary form
- Data Protection & Disclosure Declaration for all key applicants and any personal guarantors
- Latest 2 years complete accounts, including P&L
- Up to date management accounts and trading performance evidence (including P&L and aged debtors/creditors list)
We will not be able to proceed with your case without the Atom RLS supplementary form, please ensure this is submitted with the application.
Once you’ve contacted us for a quote our TBDM or RBDM team will be in touch about the application and to discuss your case, including eligibility and to provide you with indicative pricing.
The Recovery Loan Scheme (RLS) is a government scheme aimed at supporting access to finance for UK businesses and can be used for business purposes, including managing cash flow, investment and growth.
It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a Coronavirus Business Interruption Loan (CBILS), a Coronavirus Large Business Interruption Loan (CLBILS) or a Bounce Back Loan (BBLS) facility are able to access the new scheme.
Subject to our lending policy, businesses can borrow between £250k and £2 million (with lower maximum loan amount restrictions applying to borrowers in scope of the Northern Ireland Protocol), available with loan terms of up to six years and with satisfactory security being put in place for the loan.
The loan can be used for business investment, to refinance existing debt, and for cash flow purposes.
The Scheme provides Atom bank with a government-backed 70% guarantee against the outstanding balance of the facility. Please be aware that your customer will remain liable for the entire loan amount. We will seek to recover the outstanding balance of their loan from them, as well as the proceeds of any security they, or any security provider on their behalf, has given for the loan. It is only after this that we will look to realise the government guarantee. Businesses will also be required to meet the costs of interest payments and any fees associated with the facility from the outset.
Atom bank will be required to undertake standard credit, fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks for all applicants. When making our assessment, we may disregard concerns over short to medium term performance owing to the pandemic.
The Scheme is open to most businesses who meet the eligibility criteria and have a turnover of up to £45 million per annum per borrower group.
A business with an existing facility under the:
- Bounce Back Loan Scheme (BBLS)
- Coronavirus Business Interruption Loan Scheme (CBILS)
- Coronavirus Large Business Interruption Loan Scheme (CLBILS);
- Recovery Loan Scheme Phases 1 & 2 (RLS 1 & 2)
can still access the new Scheme, providing it is eligible and its total borrowing is within our affordability assessment. Please note that the total amount of subsidy received by the customer may affect the maximum amount they can borrow.
To be eligible for a facility under the Recovery Loan Scheme, a business must meet certain eligibility criteria including but not limited to:
- Its business activity must be UK-based and it must generate more than 50% of its turnover from trading activity (registered charities and further education establishments are exempt from this requirement). This includes income from investment/rental properties;
- It must be engaged in trading activity in the UK at the time it draws down the facility;
- It must provide a borrowing proposal that we consider viable. We may choose to disregard any concerns over a business’s short to medium term business performance due to the uncertainty and impact of COVID-19 in our assessment;
- It must not be in collective insolvency proceedings;
- A borrower cannot be a bank/ building society; an insurer or reinsurer (can be an insurance broker); a public-sector body; a state funded primary or secondary school; or an individual other than a sole trader or a partner acting on behalf of a partnership.
The scheme is open until 30th June 2024, subject to review by the British Business Bank.
Yes, we want to support new borrowers as well as our existing customers. Taking part in the Scheme means we can offer loans to small and medium businesses (SMEs) in these uncertain times.
Please submit your customer’s application via Portal (you will need to register with us if you haven’t already done so) including the RLS Supplementary form, as well as a Data Protection and Disclosure Declaration for all applicants (plus any Personal Guarantors). We will also ask you to provide the following supporting documents with their application:
- Latest 2 years complete accounts, including P&L (for trading businesses)
- Up to date management accounts (where the filed accounts are older than 9 months)
Please refer to our BBSL & RLS Application Checklist when you’re putting together an RLS application to ensure that all required documents are included. If anything is missing, it may slow down the application process.
If Atom can offer a commercial loan on equivalent terms without the need to make use of RLS, we may do so.
A Business is considered to be in difficulty if it has one of more of the following features:
- It holds a credit rating, with a long-term issuer or debt rating below Credit Quality Step 5 from a recognised rating agency; or
- It does not hold such a rating but is considered by the Lender to be:
- Of poor credit standing; and
- Subject to very high credit risk; or
- The borrower is subject to Relevant Insolvency Proceedings.
We take all these elements into account in assessing an application through our standard processes in any case.
‘Relevant Insolvency Proceedings’ means the following UK proceedings:
- Winding-up by or subject to the supervision of the court;
- Creditor’s voluntary winding-up (with confirmation by the court);
- Administration, including appointments made by filing prescribed documents with the court;
- Voluntary Arrangements under insolvency legislation; and
- Bankruptcy or sequestration
The ‘voluntary arrangements’ listed above include company voluntary arrangements and individual voluntary arrangements. Receiverships, members' voluntary liquidations, restructuring plans under Part 26A of the Companies Act 2006 and schemes of arrangement under Part 26 of the Companies Act 2006 are not Relevant Insolvency Proceedings.
The maximum amount a business can borrow depends whether or not they fall within the scope of the Northern Ireland Protocol.
The maximum facility value per borrower (if the borrower is part of a group the limits apply per borrower group) is:
- £2 million for businesses across all sectors outside the scope of the Northern Ireland Protocol; or
- For businesses in scope of the Northern Ireland Protocol:
- £110,000 for businesses in the agriculture sector;
- £170,000 for businesses in the aquaculture and fisheries sector;
- £570,000 for businesses in the road haulage sector; and
- £1 million for businesses in all other sectors.
Accessing a facility through RLS counts as a subsidy. If the business has received any previous subsidy, this may reduce the maximum amount they can borrow.
Loans are available for up to a six-year commitment term.
An RLS loan can be used for any legitimate business purpose including, but not limited to, managing cash flow, or for investment and growth purposes.
Our interest rates and fees vary depending on the specific lending proposal, but we are participating in the Scheme so we can pass on the economic benefit of the guarantee to borrowers (after taking costs into account including the Scheme lender fee). Under the Scheme, all upfront costs are capped 5% of the total loan amount. This is inclusive of valuation fees, legal fees and the arrangement fee.
Please speak to your BDM who can give you more information around fees and interest rates for RLS loans.
Yes, personal guarantees can be taken under the scheme but Principal Private Residence (PPR) are excluded.
Yes. Businesses with CBILS, CLBILS and BBLS facilities can access RLS, providing they meet the eligibility criteria for RLS and any additional lending is considered affordable by Atom bank.
If the business accessed CBILS, CLBILS, BBLS and/or RLS before 30th June 2022, they are still eligible for a RLS loan dependent on meeting the eligibility criteria. If the business took out a BBLS loan, it may count towards the allowance when determining the maximum amount a business can borrow. If your customer has received any aid through previous BBLS loans, they will have been informed by the lender at the time.
Yes, subject to meeting the Scheme eligibility requirements and providing they do not borrow more than the maximum amount they are entitled to. The maximum amount a business can borrow across different facilities and schemes will depend on a lender’s assessment of affordability and Scheme requirements.
Yes, where total financing needs (including any increase) are greater than the minimum facility sizes available under RLS.
Any refinancing will be considered as a new application for RLS, so will be subject to meeting the Scheme eligibility criteria. Refinancing can be sought with their existing lender or a different accredited lender.
Existing BBLS borrowers are able to refinance under RLS, however, borrower protections and eligibility/ terms under these schemes differ.
In certain circumstances, businesses can use an RLS facility to refinance existing debt where total financing needs (including any increase) are greater than the minimum facility sizes available under the Scheme.
For example, where a business is seeking to put itself on a more stable financial footing and/ or improve its working capital position, then, in principle, a RLS facility could be used, providing the business fulfils the Scheme eligibility criteria. Refinancing can be undertaken with or without an increase in the original borrowing.
Our Business Banking Lending Criteria allows for applications from Limited Companies, PLCs, Limited Liability Partnerships (LLPs), Partnerships and Sole Traders, all domiciled in the UK.
- Within the wider Scheme, provided that they satisfy the other eligibility criteria, RLS is open to:
- Sole traders;
- Limited partnerships;
- Limited liability partnerships;
- Co-operatives and community benefit societies; and
- Any other legal entity carrying out business activity in the UK with business activity operating through a business account.
The business must generate more than 50% of its turnover from trading activity in the UK (i.e. the sale of goods or services), unless they are a registered charity or further education establishment. This includes income from investment/rental properties.
No. The following businesses are not eligible to apply:
- Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers);
- Public Sector bodies;
- State funded primary and secondary schools.
Yes. Companies that have received funding through EIS are eligible, provided that they satisfy the other Scheme eligibility criteria.
The maximum amount that can be borrowed under RLS is at a business group level. A business group means all enterprises having at least one of the following relationships with each other:
- one enterprise has a majority of the shareholders’ or members’ voting rights in another enterprise
- one enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise
- one enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association
- one enterprise that is a shareholder in or member of another enterprise controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders’ or members’ voting rights in that enterprise, or
- an enterprise is otherwise able, directly or indirectly, to control or materially to influence the policy of another enterprise as regards carrying on an economic activity that entails offering goods or services on a market, even if the enterprise does not have a controlling interest in that enterprise.
An ‘enterprise’ refers to any entity or person engaged in an economic activity, whatever its legal form. This includes private equity / venture capital shareholdings.
Like many Government-backed business support activities, facilities provided under RLS are a subsidy as the scheme constitutes financial help that gives an advantage to a business.
For borrowers outside the scope of the Northern Ireland Protocol, facilities provided under RLS are considered a subsidy under the UK/EU Trade and Co-operation Agreement (TCA) as incorporated into UK law by the European Union (Future Relationships) Act 2020 and constitutes small amounts of financial Assistance under the Act. After the UK’s Subsidy Control Act comes into force, RLS will constitute Minimal Financial Assistance under that Act.
For borrowers in scope of the Northern Ireland Protocol, RLS counts as de minimis aid under the EU de minimis regulations.
For borrowers outside the scope of the Northern Ireland Protocol, the maximum value of subsidy they are eligible for is £315,000 in aggregate over this and the previous two fiscal years (ending 31st March).
For borrowers inside the scope of the Northern Ireland Protocol, the maximum aggregate value of subsidy they are entitled to over this and the previous two financial years of the borrower is:
- €20,000 or £17,000 if the business relates to the primary production of agricultural products
- €30,000 or £25,500 if the business relates to fisheries and aquaculture
- €100,000 or £85,000 if the business relates to road haulage, or
- €200,000 or £170,000 for all other sectors.
The borrower will be required to provide written confirmation that receipt of an RLS facility will not mean the business will breach any of the above thresholds.
If the business has received other relevant subsidy, they should have been provided a written record of the amount provided.
No. The lender will be responsible for informing the borrower of the amount of subsidy they will be receiving. This will be dependent on whether they are inside or outside the scope of the Northern Ireland Protocol, the size of the facility, and the term length of the facility. The maximum a business can potentially borrow will be impacted by any relevant previous subsidy they may have received over this and the previous two fiscal years (ending 31st March).
As an example, if the business:
- is outside the scope of the Northern Ireland Protocol,
- has not received any other relevant subsidy over this this and the previous two fiscal years (ending 31st March), and
- receives a facility of £2 million over six years,
then the total amount of the subsidy will equal £315,000.
Or, if the business:
- is inside the scope of the Northern Ireland Protocol,
- is not in agriculture, aquaculture / fisheries, or road haulage sector,
- has not received any other relevant subsidy over this this and the previous two fiscal years (ending 31st March), and
- the business receives a facility of £1 million over six years
then the total amount of the subsidy will equal £170,000 or €200,000.
As part of the application, businesses will need to complete three questions, which will assess whether or not a borrower is potentially in scope of the Northern Ireland Protocol:
- Is the business established or registered in Northern Ireland?
- Does the business have any active subsidiaries, an active parent company, a business in the same corporate group and/or operations in Northern Ireland? Or does your business have plans to operate any such entities, or establish other operations in Northern Ireland within the next three years?
- Does the business provide a service or is it part of a supply chain which is specifically tailored to the needs of a customer or customers in Northern Ireland that manufacture or sell goods or participate in the NI wholesale electricity market?
If a business answers no to all three questions, they are not considered to be in scope of the NI Protocol.
If they answer yes to any of the three questions, they will then be required to answer the additional question sets which allow us to determine whether or not they fall within scope of the Protocol and the maximum borrowing amount that will be available.
Applicants will be subject to our standard credit and fraud checks.
Yes, we must consider a business to be viable. In assessing a borrowing proposal, we may disregard any concerns over short to medium term business performance due to the uncertainty and impact of COVID-19. However, we are not required to overlook these concerns and all final lending decisions are fully devolved to us.
Interest payments and capital repayments will typically start a month after taking out a facility and be monthly or quarterly thereafter. Unlike BBLS and CBILS, the government does not provide a 12-month ‘Business Interruption Payment’ for RLS.
RLS aims to help businesses who can afford to borrow, to access the finance they need, including for managing cash flow, investment and growth. Key differences include:
|BBLS||CBILS||RLS Phase three (from Aug 22)|
|Borrower size||All businesses eligible||Businesses with turnover up to £45m||Businesses with turnover up to £45m|
|Maximum facility value||£50,000 per business
The maximum value was limited to 25% of a business’ turnover
|£5m per business
The maximum value was limited by turnover, wage bill or justifiable liquidity need
|£2m per borrower group
or up to £1m for borrower groups in scope of the Northern Ireland Protocol. Businesses in some sectors will have lower limits.
|Product types||Term loans only||Term loans, overdrafts, asset finance and invoice finance||Term loans, overdrafts, asset finance and invoice finance|
|Interest and fees||The interest is set by government at 2.5% per annum.
No lender-levied fees.
The government made a Business Interruption Payment to cover the first 12 months of interest payments.
|Interest and fees are set by accredited lenders and will vary by lender, up to a maximum of 14.99%.
The government made a Business Interruption Payment to cover the first 12 months of interest payments and lender-levied fees.
|Interest and fees are set by accredited lenders and will vary by lender, up to a maximum of 14.99%.|
|Personal guarantees||Personal guarantees not allowed.
Primary family home or vehicle cannot be taken as collateral.
For sole traders or partnerships, who do not have the benefit of limited liability, other personal assets may be at risk of recovery action.
|Personal guarantees not allowed for facilities below £250,000.
Personal guarantees capped at 20% of outstanding balance for lending above £250,000.
Primary family home cannot be taken as collateral.
|Personal guarantees allowed for facilities of all sizes, in line with a lender’s usual practices.
Primary family home cannot be taken as collateral.
|Covid-19 impact||All businesses had to declare they had been impacted by Covid-19||All businesses had to declare they had been impacted by Covid-19||Most businesses do not have to declare a Covid-19 impact. Some Charities and Further Education colleges are required to declare they have been impacted by Covid-19 (until 31 December 2021).|
|Use of other British Business Bank-administered guarantee schemes||A BBLS borrower cannot be using CBILS, CLBILS or CCFF, unless the facility refinances the whole of that other facility.||A CBILS borrower cannot be using BBLS, CLBILS or CCFF, unless the facility refinances the whole of that other facility.||A business may have accessed other guarantee schemes. CBILS and RLS facilities offered before 30 June 2022 do not affect the maximum amount that can be borrowed. BBLS facilities may affect the amount that can be borrowed.|
|Business viability||The borrower is required to self-declare they meet the eligibility criteria for the scheme. Lenders do not have to assess a business’ affordability or viability.
Not subject to insolvency proceedings or in receipt of rescue/restructuring aid.
|Business has a viable business proposition – determined without regard to any concerns over its short-to-medium term business performance due to the impact of Covid-19.
Micro or small businesses: not subject to insolvency proceedings or in receipt of rescue/restructuring aid.
Medium businesses: full EU business in difficulty test applied.
|Business has a viable business proposition – but the lender may disregard concerns over short-to-medium term business performance due to the impact of Covid-19.
Borrower cannot be subject to insolvency proceedings.
|Borrower protection||Not subject to the many of the usual consumer protections that apply to business lending under £25,000. Borrowers do not have the benefit of protection and remedies that would otherwise be available under the Consumer Credit Act 1974.||All existing statutory rights (for example, Consumer Credit Act and FCA protections) apply.||All existing statutory rights (for example, Consumer Credit Act and FCA protections) apply.|
|Government guarantee to lender||100%||80%||70%|
Where required, information about facilities provided to businesses outside the scope of the Northern Ireland Protocol may be publicised on a new UK Government transparency database. Details of the UK reporting requirements will be required after the Subsidy Control Act 2022 comes into force and is expected to apply only where the amount of subsidy received exceeds £100,000.
Information on individual facilities for businesses in scope of the Northern Ireland Protocol are not expected to be made publicly available.
A subset of the information provided in a business’s loan application may be published, including:
- The identity of the borrower, for example, the name of the business or potentially the borrower name if they are a sole trader or in a partnership
- The type / size of the business
- The region where the business is located
- The sector in which the business operates
- The date the aid was granted and the term of the facility, and
- The amount of aid granted.
The information reported is related to the business but may include personal data if the entity is a sole trader or partnership, or if the business name includes reference to a natural person.
Further information on how the Department of Business, Energy and Industrial Strategy (BEIS) and the British Business Bank process and share data can be found in the BEIS Privacy Notice and the British Business Bank Privacy Notice.
Support and help for you and your customers
While we’ve certainly had some hard times recently, we hope that our RLS loans can help you to get your customers back on their feet. We want you to feel supported through the application process, so we’ve put together some resources below:
RLS lending criteria
Remember, you can always get in touch if there’s something you’d like to talk to us about. Contact our TBDM team via firstname.lastname@example.org or 0333 399 0060, Monday to Friday, 9am to 5pm. Alternatively, you can speak to your RBDM, who’ll be happy to answer any queries.
Business finance support
The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cash flow and a list of independent advice services.
If your clients need independent support they can contact Business Debtline, a charity who provide free debt advice for small businesses and the self-employed. Visit www.businessdebtline.org or call 0800 197 6026.
The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.