Recovery Loan Scheme

Funding for businesses affected by Covid

What is the recovery loan scheme?

The Recovery Loan Scheme (RLS) is a scheme designed by the Government and by the British Business Bank to help businesses that have been affected by the coronavirus pandemic. The scheme was implemented on the 6th April 2021 following the Spring Budget announcement at the start of March.

It has replaced the Coronavirus Business Interruption Loan Scheme; Coronavirus Large Business Interruption Loan Scheme; and the Bounce Back Loan Scheme. These old schemes all ended on the 31st March 2021.

How does the recovery loan scheme work?

The recovery loan scheme is a government-backed loan that has been developed as a replacement for the existing coronavirus loan schemes (CBILS; CLBILS; BBLS). The recovery loan scheme is only being provided by lenders that have been accredited by the British Business Bank.


Is interest charged on the recovery loan scheme?

Yes, interest will be charged on the RLS. Unlike CBILS, the government will not pay the first 12 months of interest for the loan. This means that the business will be required to pay interest on the loan from the start in addition to any lenders fees. The borrower remains liable for 100% of the debt.


Who is eligible for the recovery loan scheme?

In order to be considered eligible for the recovery loan scheme, you need to meet the minimum eligibility criteria:

  • The business must be trading in the UK.
  • You need to show that your business would have been operating normally if it wasn’t impacted by the pandemic.
  • You need to show that your business has been affected by the virus.
  • Your business is not part of insolvency proceedings.

Businesses from any sector are eligible to apply for a loan, apart from a select few which are named in the next section.


Who cannot apply for the recovery loan scheme?

Any business from any industry can apply for RLS. However, there is a small list of businesses set out by the government that cannot apply for the RLS facility, these include:

  • Banks & Building Societies
  • Insurers and reinsurers (Insurance brokers are permitted to apply for the RLS).
  • State-funded primary and secondary schools.

When does the recovery loan scheme run out?

The recovery loan scheme has been extended to the 30th of June 2022. It had previously been set to expire in December 2021, so we expect another review to consider whether they government will extend the scheme or not.

Is the recovery loan scheme replacing CBILS?

Yes, the Recovery Loan Scheme replaced CBILS as of the 6th April 2021. The Recovery Loan Scheme also replaced the Coronavirus Large Business Interruption Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS).

recovery loan scheme shows shop opening up

What is the difference between RLS and CBILS?

Below is a table looking at the basic differences between RLS and CBILS.

How much can be borrowed? £50,000 – £5 million Up to £10 million
How long can a repayment plan be? Up to six years Up to six years
Will the Government pay the first 12 months of interest? Yes No
Do I have to sign a personal guarantee? Not on loans up to £250,000 Not on loans up to £250,000
How long do I need to have been trading for? 1 – 2 Years No minimum requirement
What does my annual turnover need to be? No minimum requirement No minimum requirement


For a more detailed list of the details regarding the recovery loan scheme, please check out the British Business Banking website.

Can I apply for the recovery loan scheme if I have already applied for CBILS?

Yes, you can receive access to the new scheme (RLS)  if you have previously borrowed from a CBILS, CLBILS or BBLS facility. However, the British Business Bank PLC does state that if a business previously applied for a scheme, there may be some limitations on the amount that can be borrowed.


What can I use the recovery loan scheme for?

The recovery loan scheme can be used by businesses for genuine investment purposes. Genuine investment can include managing cash flow, investment into areas of the business, or helping with growth.

Businesses need to afford the loan to help finance investment, including paying interest and lenders fees. Businesses that take out the RLS are 100% responsible for the accrued debt, which can be a risk for businesses that have been deeply impacted by COVID-19.

What are the main features of the Recovery Loan Scheme?

Below we have looked at some of the key features that are included in the recovery loan scheme. We have focused on the lenders, the finance options available and the rules for personal guarantees.


There are a limited amount of lenders that have been accredited by the British Business Bank to provide the RLS to UK businesses. However, more lenders will become accredited in due course. Only accredited lenders can provide RLS to businesses in the UK.


Finance Options

The RLS allows businesses to borrow up to £10 million from a number of financial facilities. These financial facilities let businesses choose a facility that is best suited to their situation.  The finance facilities that are on offer include:

  • Term loan
  • Overdraft
  • Invoice finance 
  • Asset finance

It should be noted that different facilities may have a minimum borrowing requirement.


Rules on Personal Guarantees

The rules for personal guarantees vary depending on the amount of money your business is looking to borrow. We have outlined the rules below:

  • Borrowing £250,000 or less: The lender does not need to take a personal guarantee out on the lending facility that you apply for.
  • Borrowing over £250,000: Lenders can independently decide whether the business needs to sign up for a personal guarantee.

How can I apply for the recovery loan scheme?

The recovery loan scheme is only available from lenders that have been accredited by the British Business Bank. At SME Loans, we are able to help broker the recovery loan scheme as we work with partners who have been accredited to do so.

To apply for the RLS you can click here, which will take you to our application portal where you will have to provide some information regarding your business. 

What are the alternatives to the recovery loan scheme?

An alternative to the government loan scheme is the Self-Employed Income Support Scheme (SEISS). This scheme provides grants for self-employed business owners who have been impacted by the coronavirus pandemic. This scheme is only available to self-employed businesses. To learn more about SEISS, go to the government website.

Alternatively, there are commercial options available which a business may want to consider. At SME Loans, we can help broker a variety of commercial facilities thanks to the diverse range of partners we work with. Financial products we can help broker include:


Why choose SME Loans?

Here at SME Loans, we recognise that over the last year businesses across the UK have been damaged due to the pandemic. That is why we are working closely with lenders to help broker the Recovery Loan Scheme to businesses in the UK.

As a financial broker, we aim to provide a quick and reliable service to help businesses find the funding that they need. We work with a panel of lenders that are able to provide a competitive financial products on the market. SME Loans is also authorised and regulated by the Financial Conduct Authority, which ensures we meet the correct compliance practices.

Frequently Asked Questions

If you still have a few questions about the recovery loan scheme, then make sure to checkout our FAQs below.

The recovery loan scheme is a scheme designed to help businesses in the UK access different financial products to help with recovery following the pandemic. The scheme is open until 31 December 2021.

To apply for the recovery loan scheme you simply need to complete our application form. You’ll need to provide some basic details about yourself and your business. Once the application is submitted and you’re successful, we will be in contact to discuss your application further.

We’re working with lenders who have been accredited by the British Business Bank to provide the recovery loan scheme to businesses in the UK. We are also able to provide alternative financing products for startups, limited companies and sole traders from a variety of different industries. 

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