Recovery Loan Scheme: Some useful application tips

30 July 2021

Business Banking

Jonathan Smith

Recovery Loan Scheme: Some useful application tips

2021 hasn’t been smooth sailing for a lot of companies. With coronavirus still causing issues across many industries, it’s little surprise that a lot of business owners are still looking for some support to assist with getting back on their feet.

Thankfully, the new Recovery Loan Scheme (RLS) has been launched to deliver further help. It’s a Government-backed successor to CBILS, CLBILS, and BBLS, and aims to offer financial assistance so enterprises can flourish once again. The British Business Bank (BBB) oversees RLS, and they have accredited lenders, including Atom bank, to offer borrowing facilities.

Not sure if the Scheme is for you? Be sure to read our quick guide to find out. If you do think that RLS could help, here are five useful tips to ensure your application goes smoothly.

Think about your business needs

As you would before taking out any kind of finance for your business, it’s important to think about what you actually need and whether borrowing money is the best way to achieve it. Consider what it is you want to do, how much financial support you’ll require, and if a certain form of finance would be better suited than others.

At Atom, you can apply for secured business loans of between £250,000 and £5 million (subject to our commercial lending policy) over a term of up to six years through RLS. It should be noted that other providers may offer other forms of finance, including overdrafts, asset finance, and invoice finance — visit the British Business Bank for more details.

Make sure that you are eligible

RLS is open to a wide range of businesses as it aims to support different industries and company sizes. The Scheme is designed to assist businesses looking to continue recovery from the pandemic, so you can apply even if you’ve previously received Government-backed financial help. However, there are some criteria you must meet.

To be eligible to apply for an RLS loan from Atom, you need to:

  • 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)
  • Satisfy our 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

RLS is not available to:

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

Seek advice from an independent broker

When you’re applying for business finance, it’s always a good idea to speak to someone who can give you advice on what options are best for your specific needs. When you go to an independent broker, you’re going to a professional who will scour the market and recommend beneficial products and terms.

What’s more, they will likely be able to tell you whether a loan is going to be the right option for your business, as well as being able to assess your potential application and tell you whether you’d be eligible. Applying through a broker is also less stressful, as they will help you to fill out the right forms and assist in gathering your paperwork.

At Atom, we only offer our secured RLS loans through a panel of qualified and experienced brokers. This is because we believe that you should always be able to find the best solution for your business and that speaking to an expert offers great value.

Tell the story of your business during the pandemic

As part of any RLS application, you will need to be able to self-certify to a lender that your business has been impacted by the pandemic — that’s why you’re applying for financial help, after all. However, it’s typically not enough just to declare that this is the case, as a lender will probably want to know a few more details.

Take any opportunity you can in your application to tell the story of how your business was impacted by COVID-19. Whether it’s been a loss of income from closures or additional debt you’ve had to take on to cover your rent, these extra details can help the lender understand exactly why you need an RLS loan and what it will be used for.

Get your paperwork ready

When you apply for an RLS loan, you will need to provide various bits of paperwork to help support your application, so it’s worth speaking to your broker and taking the time to gather everything you will need. With your paperwork in order before it’s required, you will have it in place and ready to submit for a speedier and slicker process.

While the necessary paperwork will vary from lender to lender, if you apply through Atom you will need to provide:

  • RLS supplementary form (this needs to be submitted along with your application for us to proceed)
  • 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 your business plan or response to COVID-19

Ready to apply?

Visit our Recovery Loan Scheme hub to get more information and find out how to apply.

Please note: One of the key criteria of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if we can offer you the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, we will do so.