Recovery Loan Scheme
Financial help for UK businesses following the Covid-19 pandemic
Recover and grow
The Recovery Loan Scheme (RLS) launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic.
RLS aims to help businesses affected by Covid-19 and can be used for business purposes, including, managing cash flow, investment, and growth. It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS, or BBLS facility are able to access the new scheme.
A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so
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
RLS key features
Up to £10m per business
Up to £10m facility per business: The maximum amount of a facility provided under the scheme is £10m per business (maximum £30m per group). Minimum facility sizes vary, starting at £25,000 for asset finance and £50,000 for term loans.
Interest and fees from outset
Interest and fees to be paid by the borrower from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.
Terms from 3 years up to 6 years
Term length: Term loans and asset finance facilities are available from three years up to six years.
Access to multiple schemes
Access to multiple Covid-19 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 a previous scheme may in certain circumstances limit the amount they may borrow under RLS.
No personal guarantees
Personal Guarantees: 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.
Guarantee to the Lender
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.
- Covid-19 impact: The borrower must confirm to the lender that it has been impacted by Covid-19.
- UK-based: The borrower must be carrying out trading activity in the UK.
- Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of Covid-19.
- Credit and fraud checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants. The checks and approach may vary between lenders.
- Turnover limit: There is no turnover restriction for businesses accessing the scheme.
We’re here to help get things moving
The Recovery Loan Scheme (RLS) provides financial support to businesses across the UK that are losing revenue and seeing their cashflow disrupted, as a result of the COVID-19.
The scheme is a part of a wider package of government support for UK businesses and employees.
The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.
Please see the RLS FAQs on the British Business Bank website for any queries regards the scheme.
Is your business eligible?
Check if you are eligible for an RLS loan by answering a few simple questions.
Businesses not eligible
Please note: the following are not eligible under RLS:
- Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers)
- Public sector bodies.
- State funded primary and secondary schools.
The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit the British Business Bank website for further details.