The scheme has not had as much uptake as we would have expected, says Allica Bank
While a vast majority, or almost 90%, of asset finance brokers know that the government-backed Recovery Loan Scheme (RLS) is still available for banks to use, less than half, or 49%, have recommended RLS-backed loans to clients within the last six months, Allica Bank has said.
The business bank’s latest survey also revealed that 49% of brokers hadnot recommended an RLS-backed loan to clients because they believed it could be only used for business recovery.
Allica pointed out that this lack of understanding surrounding the potential of the RLS may be holding businesses back from accessing a critical source of funding for growth.
While helping businesses recover was the original 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. The bank clarified that the scheme was now geared towards supporting businesses as they look to invest and grow.
“The RLS allows Allica to support businesses with loans that would otherwise fall outside of our usual credit appetite,” stated David Holdstock (pictured), government lending manager at Allica Bank. “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.”
To 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. More details about the scheme can be found on the British Business Bank website.
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