Fiduciam, the institutionally funded short-term lender, has been accredited by the British Business Bank as a lender under the government’s Recovery Loan Scheme (RLS).
The Recovery Loan Scheme is designed to support access to finance for UK businesses as they recover and grow following the pandemic, Fiduciam was also accredited under the Coronavirus Business Interruption Loan Scheme (CBILS) and provided £175 million in CBILS loans to support SMEs throughout the COVID-19 pandemic.
RLS enables accredited lenders to provide facilities of up to £10m with a government-backed guarantee to the lender in order to help businesses grow and recover. Fiduciam envisions that RLS will be critical in helping its borrowers tackle the global supply chain crisis and rising cost inflation.
Fiduciam will offer Business Bridge Loans, Refurbishment Loans, Permitted Development Loans and Development Loans under RLS. Loans will range from £250,000 up to £10 million under the scheme, available in a single drawdown or multiple drawdowns.
Under the CBILS scheme, Fiduciam’s loans assisted a wide diversity of SMEs from all across the United Kingdom through the worst of the pandemic. This included housebuilders, hotels, restaurants, wedding venues, nurseries, specialist engineering companies and office and retail space operators. It speaks for the strength of Fiduciam’s SME clients that every loan is performing, and that many of its clients have already been able to partially and sometimes even fully repay their CBILS loans from operating cash flow.
All RLS loans granted by Fiduciam will need to be secured against property owned by the borrower, in line with Fiduciam’s standard lending policy and criteria. Maximum loan-to-value (LTV) for properties from which a business is not being traded, is 70% for residential and semi-commercial property, and 65% for commercial property. Maximum LTV for trading properties is 70% of the vacant possession value and 60% of operating value.
Fiduciam’s RLS offering has a borrowing term of up to three years. Subject to certain conditions, existing debt can also be refinanced with a RLS facility. The same terms will apply to both new and existing customers.
To be eligible for a facility under RLS, the borrower must have been adversely impacted by the Coronavirus pandemic and the business needs to be viable, were it not for the COVID-19 crisis. The RLS scheme will run until 30th June 2022, although terms will change as per 1 January 2022.
Whilst the Scheme provides Fiduciam with a government-backed guarantee against the outstanding balances, the borrower always remains 100% liable for the debt. Recoveries under personal guarantees are capped at a maximum of 20% of the outstanding balance of the RLS facility, after the proceeds of business assets have been applied. A guarantor’s principal private residence cannot be taken as security to support a personal guarantee or as security for an RLS backed facility.
Johan Groothaert, CEO of Fiduciam added, “As always, where the banks do not lend, Fiduciam is here to help. We fill a gap left by the high street banks by providing short-term credit to allow businesses across the UK to progress their projects to a stage where high street bank financing becomes available or business’ revenues can pay off our loan. During the Covid-19 crisis we continued to stand by our borrowers by advancing new loans. We now want to give them an additional boost out of this crisis with the Recovery Loan Scheme, as we did with the Coronavirus Business Interruption Loan Scheme (CBILS). We are very proud to have been accredited by the British Business Bank for both these schemes.”