Since its launch in April to replace the CBILS, CLBILS and bounce back loan schemes, the team at Bathgate Business Finance has secured almost £1.5 million in Recovery Loan Scheme (RLS) finance for businesses across the North West.
However, we believe that lack of awareness and the limited number of accredited RLS funders means that many eligible businesses are not accessing vital funds available via the government finance scheme.
Speaking of the scheme, BDM Tracey Hamilton said: “The Recovery Loan Scheme is a really useful tool for businesses still requiring financial support as they recover from the impact of the pandemic. However, uptake at this stage is lower than with the previous CBILS scheme.
“We are finding that many businesses are either not fully aware of the new scheme or they don’t believe that they will be eligible, due to being rejected by traditional lenders or not receiving other forms of government support. Banks are not prioritising or promoting the scheme in the same way that CBILS was and there are also currently fewer RLS accredited funders, although the number is growing.”
Working closely with RLS accredited funders who are active in the market, Bathgate is urging businesses to explore the RLS scheme as a tool for business recovery. The RLS is intended to help businesses affected by COVID-19 and can be used for any legitimate business purpose, including managing cash flow, investment and growth.
Businesses who have taken out a CBILS, CLBILS or BBLS are still able to access the scheme, although the maximum they are allowed to borrow will depend on their lender’s assessment and scheme requirements.
Ian Adams, also BDM at Bathgate Business Finance, added: “We are seeing the RLS scheme being useful across a broad range of sectors, loans completed range from £25K to £250K, with clients taking smaller loans to top up existing bounce back agreements. A key benefit for loans up to £250K is no additional security is required such as personal guarantee or debenture. Under the CBILS scheme, banks generally took a debenture, which can restrict businesses obtaining additional finance in the future.”
Key RLS deals brokered by Bathgate include securing £100k for an agricultural manufacturer in Chester. After incurring costs setting up their own manufacturing facility to continue expanding product lines and exports, it had not been able to secure any CBILS, as the additional expenditure has affected trading figures. Bathgate’s team worked with the company to ensure the RLS application was submitted with the benefit of the latest accounts.
The team has also secured a £200k RLS to assist with growth and expansion of an engineering company located in North Wales. The business had seen a sharp decline in turnover due to COVID-19 but with retention of key workforce it is now seeing a growth in business. Having injected additional personal funds, the client still required additional working capital and Bathgate secured an RLS facility and invoice finance line within seven working days of its initial meeting.
Rapid turnaround is proving to be a considerable benefit of the scheme, with Bathgate securing approval for a £75k loan to support the expansion of an electrical contracting business on the same day the application was submitted, with funds being in place within three working days.
The Recovery Loan Scheme will be available until 31st December 2021, subject to review.
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