What you need to know about the Recovery Loan Scheme

recovery loan scheme

We’ve summarised the key details that are released so far about the new Recovery Loan Scheme, which is now open for applications.

What is the Recovery Loan Scheme (RLS)?

The Recovery Loan Scheme is set to replace the existing coronavirus finance support schemes (the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Bounce Back Loan Scheme (BBLS)). The scheme will run from 6 April 2021 until 31 December 2021, subject to review. The existing CBILS closes for applications at the end of March 2021 and so this will be seen as a welcomed replacement for many businesses which have struggled as a result of the pandemic.

How the Recovery Loan Scheme differs

The maximum value of a facility provided will be £10 million per business and once received, the finance can be used for any legitimate business purpose, including growth and investment. The government guarantees 80% of the finance to the lender.

The main difference with the RLS to the existing COVID-19 schemes is that there are no turnover restrictions: businesses of any size can apply for finance under the RLS, the maximum loan amount available to each business is £10,000,000.

Another difference between the RLS and existing COVID-19 financial support schemes, is to do with interest and fees that are payable on the loan. The British Business Bank will no longer pay the borrower’s interest and fees for the first 12 months. This means the borrower will have to pay the interest themselves from day one.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security.



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.


Types of finance available

Term loans and overdrafts will be available between £25,001 and £10,000,000 per business.

Invoice finance and asset finance will be available between £1,000 and £10,000,000 per business.

The term of the loans will be as follows:

  • Up to six years for term loans and asset finance facilities.
  • Up to three years for overdrafts and invoice finance facilities.


Eligibility criteria for Recovery Loan Scheme

You will be able to apply for a loan if your business:

  • is trading in the UK

You will need to show that your business:

  • is viable or would be viable were it not for the pandemic;
  • has been impacted by the coronavirus pandemic; and
  • is not in collective insolvency proceedings.

Businesses which have taken out a CBILS, CLBILS or BBLS facility previously will be able to access the new scheme, although the maximum they will be allowed to borrow will depend on the individual lender’s assessment and scheme requirements. The approach may vary between lenders but all businesses will have to meet all other eligibility criteria.


Who will offer these loans?

A list of accredited lenders has not yet been made available. However, there are a number of major banks that have already signed up to the scheme. We will be keeping a close watch for the details of the accredited lenders which will be released in the coming weeks and update this page when they are confirmed.

Who cannot apply

Businesses from any sector will be eligible to apply, except:

  • banks, building societies, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools


Why use a broker?

Like any type of business finance, the recovery loan scheme is provided by a panel of accredited lenders. The application process for the scheme is the same as applying for any type of business finance and there is a possibility of lenders turning you down.

With specialised Commercial Finance experience, our advisers are likely to have a wider breadth of experience than your direct bank contact, especially in dealing with complex cases.