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Recovery Loan Scheme

From 1 July 2024 the RLS has been extended and rebranded to the Growth Guarantee Scheme Loan

The Recovery Loan Scheme (RLS) Phase 3 is a Government backed initiative designed to support eligible UK businesses to survive, recover and grow.

The Recovery Loan Scheme is now closed to new applications.

To benefit from the scheme, you must have made a successful application and have also received a Facility Offer Letter from HSBC UK Bank plc on or before 30th June 2024.

At a glance – RLS with HSBC:

For all amounts we will review security requirements on an individual basis. If security requirements (including personal guarantees) are deemed appropriate we will discuss and agree with customers as part of our credit approval process.

Existing business assets may be taken to secure a RLS Phase 3 loan.

There is no fee required to be paid by you for the Government guarantee.

The RLS Phase 3 scheme is open to new and existing customers.

The RLS Phase 3 scheme will be available until 30th June 2024.

The scheme will only be open to businesses with an annual group turnover of £45,000,000 or less.

The timing for processing applications will vary and are subject to receipt of some supporting documentation and information (such as the list below):

Cash flow forecast
Business plan
Latest Annual accounts

Capital repayment holidays are available for up to 24 months throughout the life of the loan from drawdown, subject to status.

A Government guarantee which secures bank loans to any viable business with a sound borrowing proposal.

The RLS Phase 3 loan can be used where we would either:

not have been prepared to offer a Commercial Facility for the same amount on similar terms; or
would only have been prepared to offer a Commercial Facility on similar terms at a higher price.

Any UK business not subject to the Northern Ireland Protocol can apply for a RLS Phase 3 loan of between £25,001 and £2,000,000 subject to (i) eligibility and viability assessments and (ii) previous relevant subsidy amounts received by you or any member of your group.

Any UK business that is subject to the Northern Ireland Protocol can apply for an RLS Phase 3 loan between £25,001 and £1,000,000 subject to (i) eligibility and viability assessments and (ii) previous relevant subsidy amounts received by you or any member of your group and (iii) specific sector sub-limits as mentioned further in the Eligibility section below.

Loan term from 1 year up to a maximum of 6 years.

A loan arrangement fee of 1.5% of the facility amount is payable for RLS Phase 3 loans of between £25,001 and £299,999 and is negotiable for RLS Phase 3 loans between £300,000 and £2,000,000.

No loan prepayment fee should you wish to repay early (although fixed rate breakage costs may be payable for fixed rate RLS Phase 3 loans of £300,000 and above.)

Variable and fixed interest repayment options available, subject to amount borrowed and loan term.

Key Benefits

Businesses that have received support under the previous Government COVID19 guaranteed loan schemes are still eligible to access finance under this scheme, subject to eligibility and limitations.

Funding to support your business to survive, recover and grow.

Capital repayment holidays available on an RLS Phase 3 loan where needed, subject to approval.

Repayments will be higher and more interest payable when capital repayment holidays are taken.

Quick Check RLS Eligibility Criteria

Is your business turnover or, if applicable, the aggregate turnover of your group for the last financial year less than £45,000,000 or forecasted to be less than £45,000,000 where your business has been trading for less than 12 months?
Is your business based in the UK?
Will the funding you require be used to support business activity within the UK?^*1
Is over 50% of your group's business turnover generated from trading activity?^*2
If you are a registered charity or a further education college, has your business been impacted by Covid19?^*3
Do you operate in an eligible sector^*4?
If you are not subject to the Northern Ireland Protocol, is the amount you require to borrow between £25,001 and £2,000,000?^*5
If you are subject to the Northern Ireland Protocol, is the amount you require to borrow between £25,001 and £1,000,000?^*6
Is funding required for 6 years or less?
You must not be a business in difficulty^*7
You understand that you will be liable for 100% of any facility that may be provided, and that HSBC will always seek to recover the outstanding balance of any facility from you and the proceeds of any security you, or any security provider on your behalf, has given for the loan.
An RLS Phase 3 loan must not be used in support of export related activities.

^*1 If you are a registered charity or a further education college, on or prior to 31 December 2022, and you obtain a RLS Phase 3 loan, then this criterion will be satisfied if you are or will be engaged in activities in the UK upon first draw down of that RLS Phase 3 loan.

^*2 “Trading Activity” means any trading or commercial activity that generates turnover (whether or not such activity is carried on with the intention of making a profit).

^*3 This criterion will apply will apply to any applications received by registered charities or further education colleges on or prior to 31 December 2002 and will not apply on and from 1 January 2023.

^*4The following trades and organisations are not eligible to apply: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools.

^*5 If you are not in scope of the Northern Ireland Protocol, the maximum RLS Phase 3 loan amount of £2,000,000 may be reduced if you or any member of your group have received certain previous subsidies. We will require you to confirm the relevant subsidy (if any) you or any member of your group have received as part of your application.

^*6 If you are in scope of the Northern Ireland Protocol, the maximum RLS Phase 3 loan amount of £1,000,000 may be reduced if you or any member of your group have received certain previous subsidies and/or are in one of the following sectors, which will be subject to maximum loan amount sub-limits as follows: £110,000 for agriculture, £170,000 for fishery and aquaculture and £570,000 for road haulage. We will require you to confirm the relevant subsidy (if any) you or any member of your group have received and whether your business is in one of these sectors as part of your application.

^*7 Please refer to the Business in Difficulty section in the FAQs for further information.

Important Information

You are liable for repaying 100% of the loan and HSBC will always seek to recover the outstanding balance from you and any security you, or any security provider on your behalf, has taken under the loan.
For all RLS Phase 3 loans we will review security requirements on an individual basis. If security (including a personal guarantee) is deemed appropriate we will discuss and agree with customers as part of the credit approval process.
It is not necessary for you to hold a Business Current Account with us in order to apply for or maintain an RLS Phase 3 loan, unless we are seeking a debenture or fixed charge over book and other debts as security for the loan.
Eligibility is also subject to you not having breached the terms of any loans made available under the existing Government COVID19 guaranteed loan schemes, or the Enterprise Finance Guarantee scheme.
Businesses that have taken out a CBILS, CLBILS, BBLS or previous RLS facility are able to access the new scheme although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS Phase 3.

Next Steps

All applications need to be submitted through our Recovery Loan Scheme portal.

Application information provided will be assessed and we may ask you to provide further information to support request.

To complete the application, you will need the following information:

Current company information
Loan amount
Details of the impact of Covid19 to your business
Most recent annual accounts (Where applicable)
12 months forecast turnover

We may be required to ask additional questions if you fall under Northern Ireland Protocol.

Recovery Loan Scheme FAQS

General Information

What is the Recovery Loan Scheme Phase 3?

The RLS Phase 3 is designed to support eligible UK businesses to survive, recover and grow in order to aid the UK economic recovery from the COVID19 pandemic. Customers requesting a RLS Phase 3 loan are required to confirm viability and affordability in line with our standard credit assessment.

Please be aware that you're liable for the entire loan amount. We'll seek to recover the outstanding balance of your loan from you, as well as the proceeds of any security you, or any security provider on your behalf, has given for the loan. Only after this will we look to realise the government guarantee.

How long will the RLS be available for?

RLS Phase 3 will be available until 30^th June 2024.

Can I still obtain a BBL, CBIL, CLBIL or previous RLS loan?

No, these schemes closed on 31^st March 2021 in the case of BBLS, CBILS and CLBILS. RLS Phase 1 closed on 31^st December 2021 and RLS Phase 2 closed on 30^th June 2022.

I have a question on RLS Phase 1 or RLS Phase 2?

Please refer to the Contact Us link at the bottom of this page for further support and assistance.

Guarantees and Payments

Will I have to provide a personal guarantee or my home as security?

For all RLS Phase 3 loans we will review security requirements on an individual basis. If security (including a personal guarantee) is deemed appropriate we will discuss and agree requirements with you as part of the credit approval process.
Regardless of the size of the loan, a personal guarantor’s principal private residence will not be used as security for a RLS Phase 3 loan.
You do not need to open a bank account to obtain a RLS Phase 3 loan or maintain your bank account with HSBC, unless we are seeking a debenture or fixed charge over book and other debts as security for the loan.

If your business is experiencing financial difficulty, please review www.business.hsbc.uk/en-gb/financial-difficulty and contact us to discuss how we may be able to help.

Can I request an Interest or Capital Holiday?

Interest is payable upon drawdown and must be serviced by the borrower.
Capital Repayment Holidays are available up to 24 months, subject to our standard credit assessment, purpose of the request and viability.

Eligibility

What are the eligibility criteria?

Please see the ‘Quick check RLS eligibility criteria’ section on this page.

Am I guaranteed to be eligible for a RLS Phase 3 Loan?

Unfortunately, we can’t guarantee that you’ll be eligible.

You must be an existing HSBC business customer or complete our on boarding procedures so we can provide your loan.

You must meet the scheme rules which are set out in the eligibility criteria here.

Do I need to provide evidence that I have a viable business?

Yes. You must show in your borrowing proposal that your business will generate sufficient income to meet the repayments of the business liabilities. We will then assess your borrowing proposal using our normal lending criteria.

Who will be classed as part of the same group as me?

Enterprises having at least one of the following relationships with each other will be classed as part of the same group:

(A) one enterprise has a majority of the shareholders’ or members’ voting rights in another enterprise;

(B) one enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise;

(C) one enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association;

(D) one enterprise, which is a shareholder in or member of another enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders’ or members’ voting rights in that enterprise; or

(E) an enterprise is otherwise able, directly or indirectly, to control or materially to influence the policy of another enterprise as regards carrying on an economic activity that entails offering goods or services on a market, even if the enterprise does not have a controlling interest in that enterprise.

For this purpose, an ‘enterprise’ refers to any entity or person engaged in an economic activity, irrespective of its legal form. Enterprises having any of the relationships referred to in points (a) to (e) above through one or more other enterprises shall also be considered to be a single group.

I have or a member of my group has received a subsidy in the past, can I still get a loan?

Yes, as long as you meet the scheme's eligibility criteria. Any previous subsidy received by you or any member of your group, however, may impact your eligibility for RLS Phase 3 and may reduce the maximum loan amount you would be eligible for under RLS Phase 3.

What sectors are ineligible for RLS?

The following trades and organisations are not eligible to apply: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools.

What percentage of my annual turnover must be generated by trading activities to be eligible for RLS?

You must be generating together with your group more than 50% of your income from trading activity. RLS is not designed to support shell companies or investment companies. Trading Activity is defined as any activity that generates turnover (whether or not such activity is carried on with the intention of making a profit). Please note, if you are a registered charity or further education college, and we offer you a loan on or prior to 31 December 2022, then this criterion will be satisfied if you are or will be engaged in activities in the UK as at the initial draw down date of that loan.

Is there a maximum turnover?

The maximum turnover is £45,000,000.

Are there any limitations?

If you are not in scope of the Northern Ireland Protocol, the maximum RLS Phase 3 loan amount is £2,000,000 however this may be reduced if you or any member of your group have received previous relevant subsidies. We will require you to confirm the relevant subsidy (if any) you have received as part of your application.

If you are in scope of the Northern Ireland Protocol, the maximum RLS Phase 3 loan amount is £1,000,000 however this may be reduced if you or any member of your group have received previous relevant subsidies and/or are in one of the following sectors, which will be subject to maximum loan amount sub-limits as follows: £110,000 for agriculture, £170,000 for fishery and aquaculture and £570,000 for road haulage. We will require you to confirm the relevant subsidy (if any) you or any member of your group have received and whether your business is in one of these sectors as part of your application.

How should I calculate trading activity and turnover for start ups?

For start-ups, or SMEs which have traded for less than 12 months, you should estimate this based upon your business forecasted turnover for the first 12 months of trading.

Are there any sector specific considerations that I need to consider when applying for a loan?

Sector specific considerations are applicable when considering whether your business is within scope of the Northern Ireland Protocol. These apply to businesses active in the agriculture, fishery and aquaculture and road haulage sectors.

Business in Difficulty

What type of businesses will be captured by the “business in difficulty” definition?

A business will be considered a business in difficulty if it meets one or more of the following features:

(A) if it holds a credit rating, it has a long-term issuer or debt rating below Credit Quality Step 5 from a recognised rating agency; or

(B) if the applicant does not hold such a rating, an applicant, is considered by us to be:

of poor credit standing; or
subject to very high credit risk; or
the applicant is subject to Relevant Insolvency Proceedings.

For the purposes of Relevant Insolvency Proceedings this means the following UK proceedings:

(A) winding-up by or subject to the supervision of the court;

(B) creditors' voluntary winding-up (with confirmation by the court);

(D) voluntary arrangements under insolvency legislation; and

(E) bankruptcy or sequestration.

The ‘voluntary arrangements’ listed above include company voluntary arrangements and individual voluntary arrangements. Receiverships, members' voluntary liquidations, restructuring plans under Part 26A of the Companies Act 2006 and schemes of arrangement under Part 26 of the Companies Act 2006 are not Relevant Insolvency Proceedings.

Application Information

Where do I go to apply for the RLS?

You can apply online by using our RLS application portal. Please review all of the information on the portal and upload the required documents to assist us with your borrowing request.

How quickly are these loans approved?

RLS loans will be assessed through our normal credit assessment process. Where approved, and if terms and conditions are satisfied, we will endeavour to make the loan available for drawdown as soon as possible.

The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit http://www.british-business-bank.co.uk/recovery-loan-scheme.