The Fund
NEL Fund Managers is accredited to lend under the new iteration of the Recovery Loan Scheme (RLS) which launched in August 2022. We can now offer government backed loans of £25,001 to £250,000 to eligible businesses in Durham, Northumberland and Tyne & Wear as they recover and grow following the Covid-19 pandemic. Please speak to a member of the NEL investment team if you are interested in discussing how RLS may work for your business.
What NEL can offer under RLS:
- Loans of £25,001 to £250,000
- Loans are unsecured, without the need for Director’s Guarantees
- Terms up to 5 years
The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt. Businesses are required to meet the full costs of capital and interest payments from the outset, and any fees associated with the RLS facility.
Businesses that have taken out a CBILS, CLBILS or BBLS facility are still able to access RLS although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under the new scheme.
If your business is based outside of Durham, Northumberland and Tyne & Wear, please visit the British Business Bank lenders list to find a local or national lender.
About RLS
The new iteration of the Recovery Loan Scheme (RLS) launched in August 2022 and is designed to support access to finance for UK small businesses as they look to invest and grow.
Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022, although in some cases it may reduce the amount a business can borrow.
Scheme features include:
- Up to £2m facility per business group: The maximum amount of a facility provided under the scheme is £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
A borrower in scope of the Northern Ireland Protocol may borrow up to £1m per business group, unless such borrower operates in a sector where aid limits are reduced, in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries / aquaculture and road freight haulage. - Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years.
- Personal Guarantees: Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the Scheme.
- Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
- Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow.
- All borrowers in receipt of a subsidy from a publicly-funded programme should be provided with a written statement, confirming the level and type of aid received.
Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive. - Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.
Business Finance Support
The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
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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 |
Eligibility
To be eligible for an NEL loan under the Recovery Loan Scheme, your business must be based in Durham, Northumberland or Tyne & Wear
Eligibility Criteria include the following:
- Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).
- UK-based: The borrower must be carrying out trading activity in the UK. To be eligible for an NEL loan under the Recovery Loan Scheme, your business must be based in Durham, Northumberland or Tyne & Wear
- No Covid-19 impact test required: Unlike with the previous phases of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19. For charities and Further Education colleges, confirmation of Covid-19 impact will still be required in some instances.
- Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
- Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings.
- Purpose: the facility must be used to support trading in the UK and cannot be used to support certain export related activities. There are certain restrictions on the use of proceeds of facilities in the agriculture, fisheries and aquiculture, and road freight transport sectors for borrowers impacted by the Northern Ireland Protocol.
Please note: The following are not eligible under RLS:
- Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers)
- Public sector bodies
- State funded primary and secondary schools
- ERDF sector restrictions also apply, please speak to us for more detail.
If your business is based outside of Durham, Northumberland and Tyne & Wear, please visit the British Business Bank lenders list to find a local or national lender.
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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 |
Process
To begin the application process please complete our online enquiry form or call the investment team on 0345 369 7007.
You will need to provide certain documents when you apply for an RLS-backed facility. These are likely to include:
- Management accounts
- A business plan
- Historic accounts
- Details of assets
- The amount of any previous subsidy received
- Decision-making on whether a business is eligible for RLS is fully delegated to the British Business Bank’s accredited RLS lenders.
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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 |
