Introduction
The Recovery Loan Scheme (RLS) 3.0 is a UK government-backed initiative aimed at supporting businesses as they navigate the challenges and opportunities of the post-pandemic landscape. While the scheme offers a lifeline, the application process can be daunting. This article outlines the key aspects of the RLS, the information typically required for a successful application, and how VFD Pro’s reporting and modelling suite can streamline this process.
Understanding the Recovery Loan Scheme 3.0
Key Features:
- Facility Sizes: Loans of up to £2 million are available.
- Purpose: The loan can be used for any legitimate business purpose, including managing cash flow, investment, and growth.
- Term Length: Available for three months up to six years.
- Pricing: Interest rates and fees will vary depending on the lender’s proposal.
- Personal Guarantees: Can be taken at the lender’s discretion but Principal Private Residences cannot be taken as security.
- Guarantee to Lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility.
Eligibility Criteria:
- Turnover Limit: Up to £45 million on a group basis.
- UK-based: Must be operating in the UK.
- Viability Test: The lender must consider the business to have a viable proposition.
Information Required for Application
General Information:
- Business Details: Name, registration number, and contact information.
- Business Plan: A detailed plan outlining how the loan will be used.
- Financial Statements: Balance sheets, income statements, and cash flow projections.
Additional Checks:
- Credit Check: All applicants will be credit-checked by lenders.
- Fraud Checks: Lenders also carry out fraud checks.
How VFD Pro Can Help
Comprehensive Financial Reporting
VFD Pro connects to popular cloud accounting platforms like Xero, QuickBooks, and Sage, automating the extraction of financial data. This can save valuable time when gathering the financial statements required for loan applications.
Business Planning and Forecasting
VFD Pro offers pre-populated business growth models that can be used to create a compelling business plan, demonstrating to lenders how the loan will be utilized for growth or stability.
Performance vs Plan Reporting
The platform provides growth planning and reporting features that can help businesses track their performance against their plans. This real-time data can be invaluable when communicating with lenders.
Due Diligence and Valuation
For businesses looking to secure a loan for expansion or acquisition, VFD Pro aids in exit planning, forecast valuation, and due diligence, providing a comprehensive picture of the business’s financial health.
Training and Support
VFD Pro’s Mastery and Mastermind programmes offer extensive support and training, helping businesses and their advisors understand how to prepare a robust loan application.
In Conclusion
The Recovery Loan Scheme 3.0 offers a significant opportunity for UK businesses in need of financial support. While the application process can be complex, leveraging a tool like VFD Pro can simplify the process, save time, and increase the likelihood of a successful application. With its comprehensive suite of financial reporting and modelling tools, VFD Pro is an invaluable asset for any business looking to secure funding through the RLS.
Would you like to know more about how VFD Pro can be integrated into your loan application process? Feel free to reach out for a personalised consultation.
