Back in business with the Recovery Loan Scheme

If your business needs financial support as you recover from the pandemic and grow, the government’s Recovery Loan Scheme (RLS) is still available to help.

The scheme aims to improve the terms offered to businesses by providing a government-backed guarantee against the outstanding balance of the loan. Nearly 50 banks and other lenders are accredited by the British Business Bank so far to participate in the scheme.
Lenders can provide up to £10 million to a business as one of:

  • a term loan;
  • an overdraft;
  • invoice finance;
  • asset finance.

The RLS guarantee depends on the amount borrowed. If that is £250,000 or less, the lender will not take any personal guarantee. Above that figure, the maximum that can be covered is capped at 20% of the outstanding balance of the RLS facility after applying the proceeds of business assets. The lender may also require a personal guarantee, which cannot include a borrower’s only or main home.

To qualify under the RLS your business must:

  • have been impacted by the Covid-19 pandemic – you will have to confirm this to the lender;
  • be trading in the UK;
  • have a viable business proposition.

A lender may disregard any concerns over short- to medium-term business performance resulting from the impact of Covid-19.

There is no turnover restriction for businesses accessing the scheme. Approved finance applications are within the discretion of the lender, which will make all the usual checks. The lender will require evidence that you can afford to repay the loan and is likely to ask for management accounts, a business plan, annual accounts and details of assets.
The RLS is available until 31 December 2021. Approach lenders directly to make an application.