Recovery Loan Scheme
Financial support for businesses across the UK as they recover and grow following the coronavirus pandemic.
The new Recovery Loan Scheme (RLS)Link opens in a new window helps give UK businesses ongoing access to finance as they recover from the economic impact of the COVID-19 pandemic.
The scheme can be used for any legitimate business purpose, including managing cashflow, investment and growth. It is designed to appeal to businesses that can afford to take out additional debt finance for these purposes.
At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022. Further information on this extension will follow in due course.
Find out more on gov.uk's recovery loan scheme pageLink opens in a new window.
Finance of up to £10 million per business (maximum £30 million per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
Term loans, revolving credit (overdrafts), asset finance and invoice finance available (depending on what type of finance the lender is accredited for).
Term loans and asset finance facilities are available from three months for up to six years, with overdrafts and invoice finance available from three months for up to three years.
Businesses must meet the costs of interest payments and any fees associated with the facility.
The annual effective rate of interest, upfront fee and other fees cannot be more than 14.99%.
Lenders can’t take personal guarantees for facilities of £250,000 or less. Above £250,000, the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the facility after the proceeds of business assets have been applied. No personal guarantees can be held over principal private residences.
The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.
Who can apply
Your business must:
- have been affected by Covid-19 - you'll need to confirm to the lender that the coronavirus pandemic has had an impact on your ability to operate
- be carrying out trading activity in the UK
- have a viable business proposition – your lender may disregard (at its discretion) any concerns over your business’ performance over the short to medium term because of the uncertainty and impact of Covid-19
There is no restriction on turnover, meaning your business can access the scheme regardless of what amount of revenue it generates.
When you apply to RLS, the lenders are required to carry out credit and fraud checks for your business. The type of checks, and how they’re done, may vary between lenders.
Who can't apply
You won’t be eligible for RLS if your business is:
- a bank, a building society, an insurer or a reinsurer (this doesn’t include insurance brokers)
- a public-sector body
- a state-funded primary or secondary school
- If you’ve already used a coronavirus support scheme
If your business has already borrowed from a previous coronavirus loan scheme – namely:
- the Bounce Back Loan Scheme (BBLS)
- the Coronavirus Business Interruption Loan Scheme (CBILS)
- the Coronavirus Large Business Interruption Loan Scheme (CLBILS)
RLS is still open to you, although the amount you have borrowed under an existing scheme may in certain circumstances limit the amount you may borrow under RLS.
Step 1: Find a lender on the British Business Bank website
The RLS will initially be available through lenders and partners accredited by the British Business Bank. New lenders under the scheme will be listed as they become accredited.
Step 2: Contact a lender
You should first approach an RLS-accredited lender yourself, ideally via its website.
Not every accredited lender can provide every type of finance available under RLS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.
Step 3: Submit your application
Applications for RLS vary between lenders. Typically, however, you'll be asked for supporting information to show evidence that you're able to afford the repayments.
This is likely to include:
- management accounts
- a business plan
- historic accounts
- details of your assets
Lenders may need further information to confirm that you’re eligible for the scheme.
Step 4: The lender makes a decision
All lending decisions are fully delegated to the RLS-accredited lender.
The lender decides whether to offer you finance based on:
- the information you've submitted
- its lending criteria
If a lender turns you down
If one lender turns you down, you can still approach other accredited lenders within the scheme.
Lenders have the authority to decide whether or not to offer you finance. If a lender turns down your application for finance under the RLS, you can apply with other RLS-accredited lenders.
If you’re unsuccessful again, there are other forms of finance available to you and your business.
Regional support
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