Recovery Loan Scheme

The Recovery Loan Scheme is now available through participating lenders.

Using the buttons below, select the option that’s most relevant to you.

About the scheme

Launched on 6 April 2021, the Recovery Loan Scheme (RLS) provides financial support to businesses across the UK as they recover and grow following the coronavirus pandemic.

You can apply to the scheme if Covid-19 has affected your business. You can use the finance for any legitimate business purpose – including managing cashflow, investment and growth. However, you must be able to afford to take out additional debt finance for these purposes.

If your business has already borrowed from any of the other coronavirus loan schemes – 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.

At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022.

From 1 January 2022, the following changes will come into force:

  • The scheme will only be open to small and medium sized enterprises (turnover <£45m)
  • The maximum amount of finance available will be £2 million per business (maximum amount per Group limited to £6m)
  • The guarantee coverage that the government will provide to lenders will be reduced to 70%

These changes will apply to all offers made from 1 January 2022.

Different lenders will have different lead times for processing applications, and it may not be the case that applications made before 31 December will be subject to the current terms. Applicants should check with their preferred lender

How it works

Lenders

The Recovery Loan Scheme will initially be available through a number of lenders accredited by the British Business Bank. New lenders under the scheme will be listed on the British Business Bank website as they become accredited.

Please note: A key aim of the Recovery Loan Scheme is to improve the terms on offer to you, but if a lender can offer you the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.

When looking to borrow, you should first approach your own finance provider – ideally via its website. You may also consider approaching other lenders if you’re unable to access the finance you need.

Types of finance

A lender can provide up to £10 million as one of the following facilities:

  • Term loan
  • Overdraft
  • Invoice finance
  • Asset finance

Guarantees

RLS gives the lender a government-backed guarantee against the outstanding balance of the facility. As the borrower, you are always 100% liable for the debt.

If you’re borrowing £250,000 or less

The lender won’t take any form of personal guarantee.

If you’re borrowing more than £250,000

The lender has the discretion to decide whether to take personal guarantees. However:

  • 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 RLS facility after the proceeds of business assets have been applied
  • no personal guarantees can be held over Principal Private Residences.

Key features of the scheme

Up to £10m facility per businessGuarantee to the lender to encourage lendingInterest and fees to be paid by the business from the outset
The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.The scheme gives the lender a government-backed guarantee against the outstanding balance of the facility.

As the borrower, you remain 100% liable for the debt.
Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.

The annual effective rate of interest, upfront fee and other fees cannot be more than 14.99%.
Term lengthPersonal guaranteesTurnover limit
For term loans and asset finance facilities: from three months up to six years.

For overdrafts and invoice finance facilities: from three months up to three years.
Personal guarantees are not permitted 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 RLS facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.There is no turnover restriction for businesses accessing the scheme.
Access to multiple schemes  
Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme, although the amount they have borrowed under an existing scheme may in certain circumstances limit the amount they may borrow under RLS.

Find out more about the scheme