Homepeer to peer lendingDetails of updated Recovery Loan Scheme revealed

Details of updated Recovery Loan Scheme revealed

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Further details of the relaunched Recovery Loan Scheme (RLS) have been unveiled today, including tweaked eligibility criteria.

The British Business Bank, which has administered the government’s Covid loan schemes, confirmed that the updated RLS will offer loans of up to £2m, apart from Northern Ireland where it will offer loans of up to £1m.

Personal guarantees can be taken at the lender’s discretion, the state development bank said, but principal private residences cannot be taken as security within the scheme.

The government will underwrite 70 per cent of the value of each loan and the annual rate of interest and fees cannot be more than 14.99 per cent.

Businesses that took out a loan under a previous government-backed scheme are still eligible to access the relaunched RLS.

Unlike the previous iteration of the scheme, borrowers are not required to confirm they have been affected by Covid-19.

Read more: Special report on P2P business lending

The British Business Bank said that the lender should consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.

However, the borrower must not be a business in difficulty, including not undergoing insolvency proceedings.

Last month, the BBB revealed that more than £4.5bn had been offered to UK small businesses under the RLS.

“Small businesses are the lifeblood of the British economy, which is why we are determined to support our traders and entrepreneurs in dealing with worldwide inflationary pressures,” said business secretary Kwasi Kwarteng last month.

“The extension of the RLS will help ensure we continue to provide much-needed finance to thousands of small businesses across the country, while stimulating local communities, creating jobs and driving economic growth in the UK.”

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