Allica Bank’s latest survey of asset finance brokers found that although almost 90% know that the RLS is still available for banks to use, less than half (49%) have recommended RLS-backed loans to clients within the last six months.
A major cause of this seems to stem from a fundamental lack of understanding of what kinds of businesses could be eligible for the scheme. Notably, just under half (49%) of brokers have not recommended an RLS-backed loan to clients because they believed it could be only used for business recovery.
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While this was initially the intention of the Scheme when it was launched by the British Business Bank during the COVID-19 pandemic, the latest iteration has removed any mention of a business needing to be in recovery from its eligibility criteria. Instead, the British Business Bank says the scheme is now geared towards supporting businesses as they look to invest and grow.
David Holdstock, government lending manager, at Allica, says the RLS remains a big opportunity for business growth: “The RLS allows Allica to support businesses with loans that would otherwise fall outside of our usual credit appetite. It’s a fantastic opportunity for brokers to help their clients access funding that they otherwise may not have been able to.
“Due to the name of the scheme, there’s an understandable misapprehension that it can only be used to support businesses in recovery, but this is no longer the case. That’s why we’re trying to raise awareness among our broker community about its many use cases.
“It’s a brilliant initiative from the British Business Bank that’s not had as much uptake as we would have expected, which is disappointing given the current economic environment.”
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By GlobalDataTo be eligible for the RLS, a business must be UK-based and have group turnover of up to £45 million. The latest iteration will run until 30 June 2024. You can find out more about the Recovery Loan Scheme at www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/
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