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RLS vs CBILS: The Key Differences You Need To Know

Estimated Read Time: 4 Minutes


Confused about how CBILS and RLS differ? Don’t be. Read on to finally understand the key differences and similarities so you can access government-backed funding with confidence.

Both of these popular schemes have been a lifeline for cash-strapped businesses desperate for additional funds during the Covid-19 crisis, but whilst similar in many ways, the two are fundamentally different.

It’s important to note that the Coronavirus Business Interruption Loan Scheme (CBILS) ended on March 31st 2021 and as a result, is no longer accepting new applications. Those who turned to the scheme as a way of financial support have already or will soon start paying their CBILS loan repayments after 12 months with no interest or fees due.

After CBILS finished, a replacement scheme aptly titled the Recovery Loan Scheme (RLS) became its successor and it’s expected to run until December 31st, 2021, though as with many covid support schemes, this is subject to review and may be extended.

Luckily, businesses don’t have to choose between the two either, as it’s possible to access an RLS loan after taking out a CBILS facility. So, if you are in need of additional funds despite having already used CBILS funding, an RLS loan could be a great way of unlocking cash for your business.

How Much Can I Borrow Through RLS?

Just like its predecessor, RLS provides businesses with plenty of choice and businesses can choose between both secured and unsecured loans. Organisations hoping to borrow through invoice and asset finance can access between £1000 to £10m (per business). Businesses opting for term loans and overdrafts can borrow between £25,001 and £10m (per business). Across a Group, the total RLS facilities can combine to reach up to £30m.

Nucleus can provide your business with an RLS loan, and you can borrow as little as £30k all the way up to £10m to beat the Covid blues. Of course, this is a huge difference from what we were able to offer through the government-backed Coronavirus Business Interruption Loan Scheme. We provided CBILS loans between £50,001 and £250,000 to thousands of businesses in need.

The two schemes are similar in many ways but certainly worlds apart when it comes to loan amounts on offer. When taken at face value, both schemes do exactly what they say on the tin! CBILS was aimed at businesses needing cash to tide them over whilst day-to-day business was interrupted, whereas the younger scheme of the two is geared towards enabling organisations to recover and hopefully thrive following the pandemic.

What Type of Business Can Borrow Through RLS?

There is no turnover limit with RLS, meaning all businesses across the UK that can show they have been affected by Coronavirus are eligible for the scheme – unlike CBILS, where only SMEs with a turnover of less than £45m could access funding.

There are eligibility restrictions imposed for this scheme and as a result, the following businesses will not be able to access RLS funding:

  • Banks, building societies, insurers, and reinsurers (including insurance brokers)
  • Public sector bodies
  • State funded primary and secondary schools

What Terms Are Available for RLS Loans?

Dependent on which facility you choose and how much is borrowed, businesses can repay their RLS loan over a period starting from 3 months up to 6 years (term loans and asset finance) or from 3 months up to 3 years (overdrafts and invoice finance).

Unlike CBILS, where the government covered the first 12 months interest and fees, with an RLS loan, businesses are required to meet the cost of interest payments and any fees associated with its RLS facility.

Well, that’s if you’re approaching another lender of course… If you want to use an RLS loan to get back on track following a tumultuous time in your business journey, you can reduce the costs for the first 12 months by accessing a Nucleus RLS loan – we provide an exclusive RLS facility that requires you to pay just interest-only for the first year.

What Criteria Must Businesses Meet to Access RLS Funding?

  • Businesses can only apply for a Recovery Loan if they carry out trading activity in the UK.
  • To use RLS funding, you must be able to confirm that your business has been negatively impacted by Covid-19.
  • Businesses must also prove viability or that it would have been viable had the pandemic not occurred.
  • Any lender, including Nucleus, will need to undertake credit and fraud checks for all RLS applicants.
  • Personal guarantees: Both schemes do not require a personal guarantee for loans up to £250k. Although for amounts larger than this figure, lenders are entitled to ask for one, however, it cannot be held over Principle Private Residences (PPR). If you are asked to provide a personal guarantee, it must be limited to 20% of the loan amount.
  • A business cannot be in collective insolvency proceedings when trying to access a Recovery Loan.
  • Borrowers remain 100% liable for the debt they incur when taking out an RLS loan.

As with CBILS, you can spend the money acquired through a Recovery Loan on any business purpose. So if you want to edge closer to your growth goals, comfortably manage cash flow or finally relocate to a bigger and better location, apply for a Nucleus Loan today.





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