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

This 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 scheme’s asset-based lending variant joins the existing term loan, revolving credit facility, invoice finance and asset finance variants, which are designed to support access to finance for UK businesses as they look to invest and grow.

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 is welcoming asset-based lenders to consider applying for accreditation.

According to the British Business Bank, its guarantee and wholesale division worked closely with UK Finance and asset-based lenders to develop the variant.

Director, commercial finance at UK Finance, Matt Davies, 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.”

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 the end of September this year, businesses had drawn more than 20,000 facilities, totalling £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.

Managing director, guarantee and wholesale solutions at the British Business Bank, Reinald de Monchy, 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.”

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