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Maximising your chances of success when applying for funding

Recovery Loan Scheme introduced

Dave Riley, Partner, Corporate Finance
24/04/2021
London city view

With effect from 6 April 2021, the government has replaced the CBILS, CLBILS and Bounce Back Loans with the new Recovery Loan Scheme.

We have substantial experience in dealing with the majority of the lenders on the scheme.

Facilities of up to £10 million are available per business and, a list of accredited lenders is available to view via the British Business Bank website. There are fewer lenders on the Recovery Loan Scheme than the previous CBILS.

There are similarities to the facilities previously provided under CBILS, namely:

  • no personal guarantees will be taken on facilities up to £250,000 and no private residence will be taken as security
  • the facilities are 80% backed by the government
  • the borrower has to meet the same criteria in that they are UK based, not in collective insolvency proceedings and, would be viable were it not for the impact of COVID-19.

The points of difference are:

  • unlike CBILS and Bounce Back loans, there is no support to cover the interest in the first 12 months
  • the terms are a maximum of three years for overdrafts and invoice finance, and six years for term loans and asset finance (rather than up to 10 years).

We can help you

There are fewer lenders on the Recovery Loan Scheme, so getting yours right first time is key to making the process as efficient as possible and maximising your chances of success. The Crowe specialist team can support you with this. We can help you compile a professional, robust application pack with all the information required, incorporating a degree of external scrutiny. This will stand you in good stead when approaching and seeking support from existing and new lenders.

We will guide you through the process by:

  • assessing your funding needs and the most appropriate borrowing proposal
  • helping to identify any potential barriers
  • creating a structured lending proposal demonstrating:
    • how the business performed financially prior to the crisis
    • an assessment of how much you need to borrow with an assumption on headroom required
    • an assumption of how trading will be impacted over the next three to six months
    • how the business is likely to perform in the next two to three years
    • three year forecasts to support your business case with upside and downside sensitivities.

If the Recovery Loan Scheme is not the solution on its own

You and your lender may have already had a conversation about applying for a loan/facilities under the scheme, along with considering a rescheduling of existing facilities.

Irrespective of whether you qualify under the Recovery Loan Scheme, we can help you to assess your current facilities and financial performance and discuss:

  • improvements in your working capital
  • preparing a robust turnaround plan for the next three years
  • consider hire purchase and finance lease capital repayment holidays, particularly if they are with the same provider
  • agree an extension to your overdraft limit as long as there is a cashflow to support the correction of the facility
  • relaxing financial covenants, for example around EBITDA levels and interest cover
  • amending lending formula, for example extending invoice discounting advance rates, extending loan terms.

Your next steps

    If you need assistance in accessing the scheme or wish to have a conversation before you apply, please get in touch with your usual Crowe contact or Dave Riley.

Download COVID-19 Funding Support Flowchart [pdf]

What funding support could you be eligible for?

Our flowchart is designed to point you in the right direction on the measures which could be available for your or your business. As more measures are introduced and more detail becomes available, the flowchart will be updated.

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Since the introduction of CBILS, Crowe has helped companies raise £19 million with a 100% success rate – against a national average of 50%.
Several government initiatives can help provide support to those with financial difficulties arising from the coronavirus disruptions.
It is time to think about business continuity preparedness as COVID-19 crisis has now reached a new critical phase.
What are the new measures have been introduced to help companies with overpayment of corporation tax during the coronavirus disruptions

Contact us

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dave riley
Dave Riley
Partner, Corporate Finance
Manchester