News

British Business Bank launches asset-based lending variant of the Recovery Loan Scheme

The British Business Bank has launched an asset-based lending variant of the Recovery Loan Scheme.

The asset-based lending variant aims to broaden the support available for small businesses in the UK to access finance through the Recovery Loan Scheme, making use of a broad range of business assets.

The new Recovery Loan Scheme asset-based lending variant joins the existing term loan, revolving credit facility, invoice finance and asset finance variants, designed to support access to finance for UK businesses as they look to invest and grow.

The Bank’s Guarantee and Wholesale division worked closely with UK Finance and asset-based lenders to develop this variant and the innovation it will bring.

Asset-based lending will allow lenders to provide loans secured by assets such as inventory, accounts receivable, equipment, or other property owned by the borrower. Recovery Loan Scheme asset-based lending will be delivered by established asset-based lenders and the British Business Bank welcomes asset-based lenders to consider applying for accreditation.

With the support of Recovery Loan Scheme asset-based lending, lenders can provide additional finance, above what they can support on a commercial basis.

By 30 September 2023, businesses have drawn more than 20,000 facilities, totaling £4.3bn, through the first two iterations of the Recovery Loan Scheme. The third iteration of the Recovery Loan Scheme was launched in August 2022 and continues to support access to finance for UK businesses.

Matt Davies, Director, Commercial Finance at UK Finance said:

“The asset-based lending variant is an important addition to the Recovery Loan Scheme, and UK Finance and its members have been pleased to work with the British Business Bank on developing it.

 

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 Recovery Loan Scheme, lenders are providing a range of options to support businesses with their working capital and can help them unlock finance for growth and investment.”

Reinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank, said:

“We wanted to diversify the support we provide for smaller businesses in the UK through the Recovery Loan Scheme, 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.”

ENDS

Media Contacts

If you are a journalist and have a media enquiry, please contact mediaenquiries@british-business-bank.co.ukLink opens in a new window

Notes to Editors

Recovery Loan Scheme

The Recovery Loan Scheme (RLS) is designed to support access to finance for UK businesses. Businesses can use the finance for any legitimate business purpose – including managing cash flow, investment and growth. However, businesses must be able to afford to take out additional debt finance for these purposes. As at 30 June 2023, businesses had drawn 20,081 facilities, totalling £4.34bn, through the earlier iterations of the Recovery Loan Scheme.

The British Business Bank administers the scheme on behalf of the Secretary of State for Business and Trade.

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support over £12.4 billion ¹ of finance to more than 90,000 smaller businesses ².

As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4 billion in finance to 1.67 million businesses. These schemes are now closed to new applications.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. Wholly owned by HM government, the Bank and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at the British Business Bank.

References:

¹ Figures as at the end of March 2023
² Figures as at the end of March 2023