Asset-based lending variant of Recovery Loan Scheme launches
The British Business Bank has launched an asset-based lending variant of the Recovery Loan Scheme (RLS).
The state development lender said that the new facility aims to broaden the support available for small businesses in the UK to access finance through the scheme.
The RLS launched in April 2021 to support businesses’ growth after the pandemic, with the majority of the loans’ value underwritten by the government.
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Subsequent iterations of the scheme include term loan, revolving credit facility, invoice finance and asset finance variants.
The new, asset-based lending variant of the scheme will allow lenders to provide loans secured by assets such as inventory, accounts receivable, equipment, or other property owned by the borrower.
The British Business Bank said that its guarantee and wholesale division worked closely with trade body UK Finance and asset-based lenders to develop the new variant.
It has invited asset-based lenders to consider applying for accreditation to deliver the scheme.
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By 30 September 2023, businesses have drawn more than 20,000 facilities, totaling £4.3bn, through the first two iterations of the RLS. The third iteration of the RLS was launched in August 2022 and continues to support businesses’ access to finance.
“The asset-based lending variant is an important addition to the RLS, and UK Finance and its members have been pleased to work with the British Business Bank on developing it,” said Matt Davies, director, commercial finance at UK Finance.
“Financial services firms want to help businesses overcome challenges and realise their potential. With the asset-based lending variant now sitting alongside invoice finance and other versions of the RLS, lenders are providing a range of options to support businesses with their working capital and can help them unlock finance for growth and investment.”
Read more: RLS delivered £4.5bn to UK businesses
Reinald de Monchy, managing director, guarantee and wholesale solutions, British Business Bank, added: “We wanted to diversify the support we provide for smaller businesses in the UK through the RLS, and we’re pleased to have made good on this promise with the launch of the asset-based lending variant. This innovation will unlock additional finance for UK smaller businesses, and we welcome any established asset-based lender to apply for this new product.”
