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What is The Recovery Loan Scheme?

Last updated: 17 October 2022

What is The Recovery Loan Scheme?

The COVID 19 pandemic has resulted in overwhelming economic disruption to businesses across the globe, with many UK businesses struggling to recover from the long-term effects of lockdowns across the country. Thankfully, if this applies to you, there is new hope through the Recovery Loan Scheme.

On 6th April 2020, The Recovery Loan Scheme (RLS) was launched with the goal of helping UK businesses to recover from the detrimental financial impact of the pandemic. The loan is available to businesses of every size, and there is no turnover restriction, so provided you have been affected by COVID 19, you may qualify for the scheme.

Whilst this money is not available directly from the government, loans are provided with a government backed guarantee against 80% of the finance to the lender, to encourage more confidence in lending. As the borrower, however, you are liable for 100% of the debt. Interest rates are determined by the individual lender, however, the combined effective annual rate of interest, upfront fees, and any other associated fees cannot exceed 14.99%.

Applications to the scheme will be accepted until June 2022, subject to review. The scheme is available solely through British Business Bank PLC accredited lenders, a list of whom is listed on the British Business Bank website.

How can the Recovery Loan Scheme help my business?

Your business may be able to borrow between £25,001 and £10 million for any legitimate business purpose; including managing cash flow, asset acquisition or business expansion, as per the breakdown below.

Loan terms are available ranging from 3 months to 6 years

Up to 3 months

Invoice finance of between £1,000 and £10 million per business

Overdrafts of between £25,001 and £10 million per business

Up to 6 years

Asset finance of between £1,000 and £10 million per business

Term Loan of between £25,001 and £10 million per business

*Loans up to £250,000, should be offered on terms without requiring personal guarantee and a maximum personal guarantee of 20% can be required for loan terms of above £250,000.

Does my business qualify for help from the Recovery Loan Scheme?

There are a number of criteria that your business must meet in order to be eligible for the Recovery Loan Scheme, which include:

  • You must conduct trade activities within the UK in any sector except for banks, insurers, and reinsurers (not insurance brokers), public-sector bodies and state-funded primary and secondary schools
  • You must have a viable business proposition
  • You must have been adversely impacted by the COVID-19 pandemic and provide adequate proof of this to the lender
  • You must not be in collective insolvency proceedings

If you’ve received short to medium-term support under any previous government finance schemes throughout the pandemic, you’ll still be able to apply under the RLS scheme, however, in some cases your borrowing may be restricted. This includes the following schemes:

  • The Bounce Back Loan Scheme (BBLS)
  • The Coronavirus Business Interruption Loan Scheme (CBILS)
  • The Coronavirus Large Business Interruption Loan Scheme (CLBILS)

How do I apply for the RLS?

Here at Union Finance, we would be happy to help you with your application for financing under the Recovery Loan Scheme, whilst making sure that you’re fully aware of the associated lending terms.

On application you will need to provide the lender with a full business proposition, including details on how you were affected by the pandemic and what the purpose of the loan is. The lender will also need to be satisfied that your business can afford to repay the loan. Proof of affordability will vary based on lender criteria, however, is likely to include:

  • Two year’s worth of certified accounts
  • Six months worth of business bank statements
  • Details of assets held

The decision on whether your business is eligible is at the discretion of the RLS lender, who must be accredited by the British Business Bank. Credit and fraud checks will also be carried out on application.

To see if your business is eligible for the RLS scheme, or for further advice and clarification on the subject, contact our friendly team today by clicking here.

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Aintu Ltd T/A Union Business Finance is an independent Asset finance broker not a lender, as such we can introduce you to a wide range of finance providers depending on your requirements and circumstances. We are not independent financial advisors and so are unable to provide you with independent financial advice. Aintu Ltd T/A Union Business Finance will receive payment(s) or other benefit from the finance provider if you decide to enter into an agreement with them. Aintu Ltd T/A Union Business Finance is an appointed representative of AFS Compliance Ltd which is authorised and regulated by the Financial Conduct Authority under number 625035. Aintu Ltd T/A Union Business Finance aims to provide our customers with the highest standards of service. If our service fails to meet your requirements and you would like to report a complaint; please click on the link below;


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