Recovery Loan Scheme

What is the Recovery Loan Scheme?

Launched on 6 April 2021, the Recovery Loan Scheme (RLS) provides financial support to businesses across the UK as they recover and look to grow their business following on from the Covid-19 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.

RLS will run until 31 December 2021, subject to review.

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How much can I borrow?

You can borrow up to £10m per business. However, the amount you receive will depend upon a number of different factors as determined by lenders. 

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 then thee lender won’t take any form of personal guarantee.

If you’re borrowing more than £250,000 then 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.