Starling, the digital bank, has been accredited by the British Business Bank as a lender under the government-backed Recovery Loan Scheme (RLS), the successor to the Coronavirus Business Interruption Loan Scheme (CBILS). This will enable it to provide term loans of between £25,001 and £250,000 to small and medium-sized enterprises (SMEs) affected by Covid-19. Applications for this lending are now open.
Starling will not require personal guarantees and borrowers will remain 100% liable for repayment of their loan. The loans are protected by an 80% government guarantee to the lender.
Businesses that have already taken out a CBILS, CLBILS or BBLS facility will be able to access the new scheme, subject to eligibility and credit assessment.
Interest will be priced according to business circumstances, businesses will be required to meet the costs of interest payments themselves from the start of the loan.
Business owners can apply for a Starling RLS term loan if they meet all of the following criteria:
- Limited Company or Limited Liability Partnership
- Trading for 24 months or more
- Have a good credit history with no arrears or defaults
- Pass Starling’s affordability checks
Loans are available for terms of up to one to six years and customers will pay a one-off 4% loan arrangement fee. SMEs will be able to apply for RLS lending via the Starling website
Helen Bierton, Starling Bank’s Chief Banking Officer, said: “Business owners have worked hard to survive and, in some cases, grow, against an extremely difficult, unusual and uncertain economic backdrop. As the economy starts to rebound, many will need additional help to support their recovery, investment and growth. Starling will be here with RLS lending to help with that. We’re delighted to be working with the British Business Bank as an RLS lender.”
The Recovery Loan Scheme is managed by the British Business Bank on behalf of and with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy (BEIS). Under the Scheme rules, the government will provide lenders with a guarantee of 80% of the outstanding principal on each loan. For loans to qualify, customers must have a borrowing proposal that the lender would consider viable if not for the coronavirus pandemic. Borrowers will be liable for repayment of 100% of the loan.