During the Autumn budget update the Chancellor confirmed the extension of the Recovery Loan Scheme (RLS). The RLS was initially set close to new applications on 31 December 2021 but will now run until 30 June 2022 so there is still time to apply.
A lender can provide up to £10 million as a Term loan, Overdraft, Invoice finance or Asset finance. RLS offers the lender a government backed guarantee against any outstanding debt. As before you as a director are always 100% liable for the debt.
If you’re borrowing £250,000 or less the lender can’t ask any form of personal guarantee. Otherwise the lender has the discretion to decide however above £250,000 “the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied”.