Assetz Capital mulls RLS participation after changes unveiled in Budget

Assetz Capital is reviewing whether it will continue participating in the recovery loan scheme (RLS) following the changes announced in the Budget.

Chancellor Rishi Sunak’s Autumn Budget announced that the scheme will be extended until 30 June, but the finance available to businesses will drop from up to a maximum of £10m per company to a maximum of £2m, and the government guarantee will be reduced from 80 per cent to 70 per cent.

Stuart Law (pictured), chief executive of Assetz Capital, said that the scheme has been “great up until now” but said that these are “pretty significant changes”, arguing that quality developments tend to be bigger than £2m.

He said the peer-to-peer business lending platform, which was accredited to the RLS in July, will make a decision in the next couple of weeks as to continuing its participation in the scheme.

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“The government support is helpful, and it’s been great but we need to look at whether these changes in any way break our ability to use the RLS,” he said.

“Now we have the data we’ll make a decision, the reduction of the government guarantee is not helpful and the drop from a maximum limit of £10m to £2m isn’t.

“We have a lot of other funding lines that we’re working on, and we need to make a decision whether we continue with the RLS or not. Hopefully we can, but we have other plans in place otherwise.”

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Under the RLS, Assetz Capital has been delivering property-secured loans between £250,000 and £10m to small- and medium-sized enterprises across the UK, covering both commercial mortgages and development finance.

Earlier this week, the British Business Bank has announced that £1.06bn has been offered via 6,190 facilities to businesses across the UK.