Recovery Loan Scheme

What was the Recovery Loan Scheme?

The RLS was a government-backed scheme that provides businesses with access to finance as they invest and grow. It offered facilities of up to £2 million for eligible businesses outside the “Northern Ireland Protocol”, and up to £1 million for eligible businesses inside the “Northern Ireland Protocol”.

The RLS launched on 1 April 2021 to help businesses recover from the impact of the Covid-19 pandemic. It replaced the CBILS, CLBILS and BBLS. Loans of up to £10m were available and the government guarantee stood at 80%. 

In 2022, the RLS was amended, with up to £2m available to SMEs and a 70% government guarantee. Although the scheme ended in June 2022, it was soon relaunched for another two years to help SMEs raise finance.

Over 50 accredited lenders offered RLS facilities with terms of up to six years. The government offered lenders a 70% guarantee against the balance of the loan. The Recovery Loan Scheme ended on the 1st July 2024. If you're seeking similar funding, consider the Growth Guarantee Scheme.

What is the Growth Guarantee Scheme?

To encourage more lending to UK SMEs, the Government will provide a 70% guarantee to the lender. It is worth remembering that the Government will not cover any interest and fees associated with the finance.

According to Business Secretary Kwasi Kwarteng, businesses won't need to certify that the Covid-19 pandemic has impacted them to be eligible. However, Lenders will need to certify that they wouldn't have been able to provide finance to applicants on their standard commercial terms – or that they would, but only at a higher interest rate. 

In this sense, the RLS will act as an extension of lenders' standard product range and will primarily be used to fund businesses that they previously couldn't. This could be due to their credit score, trading time, turnover or homeowner status. 

Is my business eligible for the GGS?

This scheme is targeted towards small businesses and as such, you must have a turnover of below £45 million. The last iteration (the Recovery Loan Scheme) predominantly supported businesses with fewer than 50 employees. Limited companies, sole traders, limited liability partnerships, and cooperative societies who have been trading for longer than two years are all eligible.

Banks, public sector companies, and businesses currently undergoing insolvency proceedings are not eligible. Additionally, businesses who gain more than 50% of their revenue from rentals or other non-trading activities are also ineligible.

Eligible funding solutions are offered for up to £2 million and businesses must be UK based and have a suitable business plan. If you meet these criteria, you can apply even if you have previously been awarded support through the Recovery Loan Scheme or Bounce Back Loan Scheme.