RLS 1.0 Evaluation Report 2024

Report and publications 22 March 2024

The first iteration of the Recovery Loan Scheme (RLS 1.0) supported access to finance for businesses between April and December 2021. This Recovery Loan Scheme 1.0 Early Evaluation report covers the short-term impact of the scheme on borrowers’ performance as well as the processes in place as part of the scheme.

The report’s key findings are summarised below:

Impact evaluation

  • RLS 1.0 had a positive impact on borrowers’ turnover– RLS 1.0 borrowers had an estimated 17% higher turnover than they would have had without the scheme
  • RLS 1.0 supported business survival– 12% of surviving RLS 1.0 borrowers reported that they “definitely” would have ceased trading and a further 47% said they would have been “very or fairly likely” to have ceased trading without the scheme
  • Finance was additional– the majority of finance extended under RLS 1.0 would not have been provided without the scheme, with an estimated economic additionally rate of 83%
  • Scheme finance was used for a variety of reasons– the most common use of RLS 1.0 finance was for day-to-day expenses and purchasing goods and materials. There was also evidence to suggest it enabled borrowers to undertake innovative activities such as developing new products and processes, research & development and reducing carbon emissions.

Process evaluation

  • Learnings from the Coronavirus Business Interruption Loan Scheme (CBILS) were used in scheme set-up– learnings taken from the delivery of CBILS include data collection and data sharing which supported the implementation of RLS 1.0. This appears to have positively impacted lenders’ ability to deliver the scheme alongside commercial lending.
  • Accreditation was relatively quick– the accreditation process for RLS 1.0 was much quicker than CBILS. Anecdotal evidence from interviews with accredited lenders suggested the process could be completed in under a month.
  • Scheme design supported objectives– RLS 1.0 provided just under £2.8bn in guaranteed lending facilities to c.10,000 businesses. This was lower than expected. However, some of the sectors which were more impacted by pandemic restrictions, for example retail and accommodation and food, had slightly higher proportions of businesses supported.

Next steps

A subsequent evaluation of RLS 1.0 exploring the medium and long-term impacts of the scheme is expected in future years.

At Spring Budget 2024, the Chancellor of the Exchequer announced that the Recovery Loan Scheme would be extended until 31 March 2026 and renamed as the Growth Guarantee Scheme.