Starling secures lender accreditation for UK Recovery Loan Scheme

Starling Bank has received accreditation by the British Business Bank to be a lender under the UK government-backed Recovery Loan Scheme (RLS).

According to Starling, this accreditation will enable the firm to provide term loans of between £25,001 and £250,000 to SMEs who have been affected by the Covid-19 pandemic. The RLS is the successor of the earlier Coronavirus Business Interruption Loan Scheme, which closed on March 31 this year.

The UK government will provide lenders with an 80% guarantee of the outstanding principal on each loan under the rules of the RLS. In order for loans to qualify, customers are required to meet the interest payment costs themselves from the start of the loan.

To apply for a Starling RLS loan, companies must be a limited company or in a limited liability partnership, have a good credit history with no defaults or arrears, pass Starling’s affordability checks and have been trading for at least two years.

Starling noted it will not require any personal guarantees and borrowers will remain fully liable for the repayment of their loans. Companies that had previously taken out a CBILS loan will also be able to access the new scheme subject to credit assessment and eligibility.

Loans are available for companies from three months to six years, with customers required to pay a one-off 4% loan arrangement fee. SMEs are able to apply for lending through Starling’s website, with borrowers required to open a Starling business bank to set up the loan.

Starling chief banking officer Helen Bierton 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.”

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