British Business Bank releases details for new RLS iteration

The new scheme, which will run until 30th June 2024, will provide a range of facilities, including term loans, overdrafts, and asset and invoice finance of up to £2m per business group.

Term loans and asset finance facilities will be available on terms between three months and six years, while overdrafts and invoice finance loans will be available from three months up to three years.

The annual effective rate of interest and fees on loans offered under the scheme will not be higher than 14.99%.

The scheme is open to SMEs trading in the UK with a turnover of up to £45m — for most borrowers, there is no requirement to confirm that they have been impacted by Covid-19.

Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30th June 2022 are not prevented from accessing the new scheme from August 2022.

The original RLS — which ran between 6th April 2021 and 30th June 2022 — has provided £4.5bn of lending through over 20,600 facilities to UK SMEs throughout its duration.

When divided by region, London SMEs have borrowed the most under the scheme, with almost £1.1bn being provided via the RLS to 3,370 London-based businesses.

The South East had the second highest amount of lending, with 2,879 businesses borrowing a total of £590m.

By sector, the construction industry was the largest borrower, with more than £730m being loaned to construction businesses under the scheme.

Catherine Lewis La Torre, CEO at BBB, said: “The BBB is committed to supporting smaller businesses in accessing the finance they need to grow sustainably.

“Thousands of businesses in all sectors and from across the UK have taken out loans under the RLS.

“This will better position them to confront both the challenges and opportunities that are ahead.”

Douglas Grant, group CEO at Manx Financial Group PLC, was positive about the impact the RLS successor would have on businesses, but emphasizes the need for a more permanent solution.

“The RLS, which Conister was accredited for in August last year, has provided the necessary catalyst that many sectors required to thrive.

“Our research recently revealed that 22% of UK SMEs that needed external finance and/or capital over the last couple of years were unable to access it — indeed, 27% have had to stop or pause an area of their business because of a lack of finance.

“SMEs have continued to struggle with accessing finance and that this lack of availability will cost them and the UK economy in terms of growth at a time when it is needed the most.

“Today’s announcement goes some way to stemming the short-term pain, but for some time now we have been calling for a sector-focused permanent government-backed loan scheme which brings together both traditional and alternative lenders to guarantee the future of our SMEs.

“We very much hope this is something that becomes a reality.”