Scheme background
The British Business Bank launched the new Recovery Loan Scheme (RLS) in April 2021, to support access to finance and growth for UK businesses as they steered a path towards a sustainable recovery following the Covid pandemic. This 1st iteration of the scheme was originally scheduled to run until 31 December 2021.
In the 2021 Autumn Budget the scheme was extended by six months to 30 June 2022, resulting in the 2nd iteration of the RLS. At that time some adjustments to the Schemes’ terms were made: the government had provided a guarantee to accredited lenders of 80% for scheme facilities offered before 1 January 2022, reduced to 70% for scheme facilities offered on or after that date. The borrower remains 100% liable for the debt.
RLS iterations 1 & 2 were closed to new applications on 30th June 2022.
As part of British Business Bank’s ongoing commitment to promote sustainable accessible funding for UK smaller businesses, to enable them to invest and grow, a new (3rd iteration) was announced by the government and opened for applications on 1 August 2022. Further details of the RLS are available on the British Business Bank website.
Performance
On 20 July 2022, the British Business Bank published performance data for RLS (iterations 1 & 2) contingent on information provided to the British Business Bank by the schemes’ accredited lenders. The data provided a breakdown of loans offered by region and sector demonstrating that accredited lenders had offered UK small businesses over £4.51 billion of finance via 20,643 facilities as at 12 July 2022, £3.83 billion of offers had been drawn down through 18,338 facilities.
To further demonstrate British Business Bank’s ongoing commitment to transparency on portfolio performance this publication provides data as at 31 December 2022 for the Government’s Recovery Loan Scheme (iterations 1 & 2). As with previous publications, the data relies on information submitted to the British Business Bank’s guarantee portal by accredited lenders.
*Data for the current 3rd iteration of RLS is not included in this publication.
Suspected fraud
Lenders have currently identified 81 RLS loans, which equates to 0.40% of the total volume, and with an aggregate drawn value of £15.26m as ‘suspected fraud’. Lenders continue to review cases, consequently this figure is subject to change. This relies on lenders’ business as usual threshold for fraud reporting. That is, the lender has derived sufficient grounds to suspect fraud, which is then reported via the British Business Bank portal.
Lenders are not law enforcement agencies or investigatory organisations. Where they have a suspicion that fraud has been committed by a borrower, they will indicate so in the information which they provide to the British Business Bank. Ultimately it is law enforcement/ the courts which determine whether or not a fraud has been committed, and so the statistics presented are only an indicator of the levels of suspected fraud which have been identified within the scheme at a given point in time.
Detailed facility status
The first table shows current figures rather than original drawn facilities figures.
See definitions below when interpreting these tables.
Table 1: RLS-Summary Facility Status
| Furthest life event reached | Number of facilities | % Number of facilities | Outstanding balance (£m) | Final amount (£m) |
|---|---|---|---|---|
| On Schedule | 18,143 | 90.26% | 3,275.74 | — |
| Arrears | 425 | 2.11% | 48.44 | — |
| Defaulted | 349 | 1.74% | 50.62 | — |
| Claimed | 306 | 1.52% | 24.95 | — |
| Settled | 317 | 1.58% | — | 28.21 |
| Fully Repaid | 560 | 2.79% | — | 180.66 |
| Grand Total | 20,100 | 100% | 3,399.75 | 208.86 |
Note on Table 1
The values in Table 1 will not sum up to the total Drawn Value as it is not possible to take account of events which can reduce outstanding balances – for example: partial repayments of a loan, certain recoveries received in respect of a loan and amounts written-off loans by lenders.
The second table shows original drawn aggregate facility amount and volume for each lender together with current aggregate amount and volume of settled facilities.
Table 2: RLS-Breakdown of facilities drawn and settled
| Lender name | Drawn amount (£m) | Drawn volume | Settled amount (£m)** | Settled volume |
|---|---|---|---|---|
| ABN AMRO Asset Based Finance N.V. | 5.61 | 8 | — | — |
| AIB Group (UK) Plc | 3.55 | 4 | — | — |
| Aldermore Bank Plc | 62.52 | 241 | 0.20 | 2 |
| Allica Bank Limited | 2.11 | 2 | — | — |
| Arbuthnot Latham & Co Ltd | 192.84 | 84 | — | — |
| Arkle Finance Ltd | 9.52 | 101 | 0.02 | 2 |
| ART SHARE Limited | 2.51 | 42 | 0.03 | 1 |
| Assetz Capital Lending Limited | 42.42 | 14 | — | — |
| Atom Bank plc | 132.51 | 180 | — | — |
| Bank Leumi (UK) plc | 32.34 | 16 | — | — |
| Bank of Scotland plc | 6.48 | 42 | — | — |
| Barclays Bank Plc | 52.66 | 183 | — | — |
| BCRS Business Loans Ltd | 3.94 | 64 | — | — |
| Big Issue Invest Ltd | 0.30 | 2 | — | — |
| Business Enterprise Fund | 9.26 | 131 | — | — |
| Business Lending Group | 24.30 | 12 | — | — |
| Capitalise Business Support Ltd | 1.88 | 24 | — | — |
| Close Brothers Ltd | 203.42 | 595 | 0.19 | 3 |
| Clydesdale Bank Plc | 48.97 | 70 | — | — |
| Compass Business Finance | 4.60 | 64 | 0.32 | 3 |
| Conister Finance & Leasing Ltd | 32.33 | 204 | — | — |
| Coventry & Warwickshire Reinvestment Trust Ltd | 1.81 | 23 | — | — |
| Cynergy Bank Ltd | 59.94 | 29 | — | — |
| Danske Bank | 2.90 | 5 | — | — |
| DSL Business Finance | 0.72 | 12 | — | — |
| Ebury Partners UK Ltd | 0.45 | 2 | — | — |
| Edinburgh Alternative Finance Limited T/A Lending Crowd | 14.97 | 96 | — | — |
| Enterprise Answers | 0.28 | 3 | — | — |
| Enterprise Loans East Midlands | 2.78 | 38 | — | — |
| EVBL (General Partner NPIF Y&H Debt) Limited | 11.66 | 51 | — | — |
| Fiduciam Nominees Limited | 4.87 | 1 | — | — |
| Finance for Enterprise | 7.07 | 76 | — | — |
| FSE GLIF LD LP | 14.19 | 18 | — | — |
| FSE GLIF SD LP | 6.34 | 24 | — | — |
| FSE MEIF LP | 10.15 | 28 | — | — |
| Funding Circle | 899.85 | 9,107 | 19.23 | 248 |
| GC Business Finance | 0.97 | 14 | — | — |
| Genesis Asset Finance Ltd | 0.90 | 16 | 0.01 | 2 |
| Growth Finance Fund LP (WhiteRock Capital Partners LLP) | 3.50 | 5 | — | — |
| Growth Lending Group Ltd | 168.20 | 44 | — | — |
| Hampshire Trust Bank Plc | 67.91 | 58 | 1.75 | 5 |
| Haydock Finance | 17.49 | 78 | 0.13 | 3 |
| HSBC UK Bank Plc | 560.50 | 2,323 | 0.12 | 2 |
| Independent Growth Finance Ltd | 9.54 | 19 | — | — |
| InterBay Asset Finance Limited | 5.55 | 30 | — | — |
| Investec Bank PLC | 68.84 | 237 | 1.54 | 2 |
| Iwoca Limited | 30.96 | 119 | 0.24 | 1 |
| Kingsway Finance group | 22.25 | 195 | 0.21 | 3 |
| Kriya Finance (Formerly MarketFinance) | 104.21 | 622 | 0.19 | 2 |
| Lendnet LLP | 16.22 | 14 | — | — |
| Lloyds Bank Plc | 59.42 | 258 | — | — |
| MEIF - ESEM SBL LP | 2.98 | 38 | — | — |
| MEIF - Maven East and South East Midlands | 12.31 | 32 | — | — |
| MEIF - Maven West Midlands | 12.37 | 28 | — | — |
| MEIF - WM SBL LP | 2.12 | 39 | — | — |
| Merchant Money Ltd | 24.25 | 137 | 0.16 | 1 |
| Metro Bank PLC | 333.73 | 181 | — | — |
| NatWest Group plc | 111.12 | 951 | — | — |
| NE Growth (ERDF) General Partner Ltd | 3.54 | 18 | — | — |
| Newable Business Loans Ltd | 3.99 | 27 | — | — |
| North East (ERDF) Small Loan Fund Limited | 0.92 | 13 | — | — |
| North West Loans NPIF GP Limited | 13.41 | 45 | — | — |
| Novuna | 39.76 | 77 | — | — |
| NPIF - NW MF LP | 1.74 | 29 | — | — |
| NPIF - YHTV MF LP | 1.55 | 28 | — | — |
| Nucleus Cashflow Finance Ltd | 141.66 | 780 | 3.46 | 26 |
| OakNorth Bank plc | 9.62 | 6 | — | — |
| Paragon Bank PLC | 52.04 | 313 | — | — |
| RM Funds | 5.71 | 5 | — | — |
| Robert Owen Community Bank Fund | 0.05 | 2 | — | — |
| Santander UK | 56.05 | 22 | — | — |
| Scania Finance Great Britain Limited | 4.07 | 21 | — | — |
| Secure Trust Bank plc | 16.45 | 7 | — | — |
| Shawbrook Bank Limited | 10.15 | 11 | — | — |
| Shire Leasing plc | 12.88 | 193 | 0.25 | 7 |
| Simply Asset Finance Operations | 75.48 | 676 | — | — |
| Skipton Business Finance Ltd | 2.84 | 24 | — | — |
| Social Investment Business Foundation | 4.82 | 16 | — | — |
| Starling Bank Ltd | 22.82 | 186 | — | — |
| SWIG Finance | 6.70 | 69 | — | — |
| ThinCats Ltd | 127.59 | 80 | — | — |
| Time Finance plc | 4.58 | 64 | — | — |
| Tower Leasing Ltd | 8.63 | 202 | 0.14 | 4 |
| Triodos Bank UK Ltd | 10.60 | 9 | — | — |
| TVC Loans NPIF GP Limited | 5.74 | 21 | — | — |
| UK Steel Enterprise Ltd | 1.26 | 6 | — | — |
| United Trust Bank Limited | 135.45 | 116 | — | — |
| Total | 4,327.39 | 20,100 | 28.21 | 317 |
**Settled – once the guarantee claim is processed and payment is released, the facility is marked as settled on the British Business Bank portal. Some lenders may be more advanced than others in their Claims and Recoveries processes which could lead to figures being distorted. Lenders may submit guarantee claims quarterly in line with the terms of the guarantee.
The British Business Bank’s guarantees portal is used by all lenders to report on guaranteed facilities and make claims under the guarantee. The reporting requirements of each scheme vary and due to the scale of the schemes, have evolved over time. The portal is updated at various points in a loan lifecycle as reported by lenders:
Definition of values
- The value for ‘Claimed’ is the amount claimed under the guarantee
- The value for ‘Settled’ is the amount paid out under the guarantee
- The value for ‘Fully Repaid’ is the full loan amount
- The value for all other life events is the outstanding balance
- on schedule– the loan is being paid as expected, including loans for which repayment is not yet due.
- outstanding balance – when used to describe on schedule is a projected figure based on the amortisation profile of individual loans. It uses existing data points to identify the remaining loan value but is limited due to some lender data not being available.
- arrears– loans with missed repayments are deemed to be in arrears. Loans are tracked in 30, 60 and 90 day cohorts by lenders to manage risk. Lenders report monthly arrears updates through the Scheme Portal on a “best endeavours” basis. Some lenders submit arrears via the automated (API) functionality in the Scheme portal, but it is not possible for smaller lenders to integrate with this functionality so arrears are entered manually. Loans in arrears that have moved to a later life-cycle stage (such as Defaulted) will be reported in the later life-cycle stage but may still carry arrears. At the time of this event occurring, this is an actual balance, and not estimated.
- defaulted– loans where the lender has issued a formal demand to the borrower. At the time of this event occurring, this is an actual balance, and not estimated.
- claimed– the Lender has submitted a claim under the guarantee. Loans sit in the claimed status while the British Business Bank awaits/processes the invoice for the claim and runs relevant checks. Under the terms of the guarantee the claim must be paid within 30 days of receipt of the claims invoice.
- settled– settlement has been made following a lender making a claim. Once the guarantee claim is processed and payment is released, the loan is marked as settled on the Scheme portal.
- fully repaid– the loan is considered closed as there is no further outstanding balance on the loan (the borrower has repaid the full amount).
- Drawn value – the total loan amount for loans which have been drawn down by the borrower – (lenders have deposited this amount into borrowers’ accounts).
- Scheme portal – the database hosted by the Bank as part of its role in administering the schemes. It is used by all accredited scheme lenders to report on guaranteed loans and make claims under the guarantee agreement. The reporting requirements have evolved over time. The portal is updated at various points in a loan lifecycle as reported by lenders.
- Suspected fraud value – value of drawn loans which are currently marked as Suspected Fraud by lenders. This flag can be added or removed by lenders at any point, and only the latest position can be provided. Suspected fraud is a subset of the drawn amount.
Limitations and further considerations
The following should be considered in relation to the data:
- data is as at 31 December 2022 from the information continuously submitted to the British Business Bank’s portal by accredited lenders. The portal is used by the British Business Bank and lenders to administer the loans. Portal data is dependent on lenders submitting accurate and timely data and is not real-time
- we are still early in the life of the scheme and in the lending cycle, so it is too soon to accurately assess levels of fraud and credit losses
- the terms of and the timing of the scheme may not be representative of the lenders’ risk appetites, their general loan credit quality, or their default experience
- given the size of the scheme, the numbers of loans, and the period over which they were offered and drawn down, data being collected remains fluid and subject to refinement and correction over time (comparative analysis may therefore have limitations)
- the timing and level of claims made on the guarantee will vary according to a lender’s business model and the characteristics of their customers (for example repayment options offered, age of businesses, whether new or existing customers)
- some lenders may be more advanced than others in operationalising their Claims and Recoveries processes which could lead to figures being distorted initially but this will stabilise over time
- lenders may submit guarantee claims quarterly in line with the terms of the guarantee
- claims on the guarantee may subsequently benefit from recovery receipts achieved at a later date (which are not reflected in the figures above), and so are not a conclusive indicator of net cost to government
- the number of guarantee claims and value is not necessarily related to the amount of fraud in a lender’s portfolio
This data is not suitable to be relied on by any party wishing to acquire rights against the British Business Bank group of companies (“BBB”) or any of the RLS guarantee scheme lenders for any purpose or in any context. Any party choosing to rely on the data detailed in this release (or any part of it) does so at its own risk. To the fullest extent permitted by law, the British Business Bank does not assume any responsibility or liability to any other party in respect of this data.
Notes:
On the 1st August 2022 the British Business Bank released details of a 3rd iteration of the Recovery Loan Scheme.
This new iteration of the Recovery Loan Scheme continues to be available through participating lenders, who are listed on the British Business Bank website. The bank has re-opened the scheme in February 2023 for other lenders to apply for accreditation.
Further information, for businesses and lenders, is available on the British Business Bank website.