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Home > News > The Recovery Loan Scheme – applications now open!

The Recovery Loan Scheme – applications now open!

15 April 2021 |

As more and more businesses reopen after the easing of the restrictions, the government has acknowledged that UK businesses may need further financial help to recover from the pandemic. Announced by Chancellor Rishi Sunak in the 2021 Budget, the Recovery Loan Scheme (RLS) launched last week (6 April 2021) whereby the government will provide an 80% guarantee to the lender.   

Businesses that have taken out previous COVID-19 impact loans such as the Bounce Back Loan SchemeCoronavirus Business Interruption Loan Scheme and Coronavirus Large Business Interruption Loan Scheme are able to access the new RLS scheme but it may limit the amount they can borrow under RLS.  

Key Features of the Recovery Loan Scheme  

Aim: providing the next stage of financial support for businesses impacted by COVID-19.  

Types of products available: loans, overdrafts, asset finance and invoice finance. 

Loan size: Up to £10m for individual businesses and up to £30m across a group 

Term: Up to 6 years (terms loans and asset finance); up to 3 years (overdrafts and invoice finance) 

Repayment: interest and fees are to be paid by the business from the outset. Despite the 80% government-backed guarantee against the outstanding balance of the facility, the borrower will always be liable for 100% of the debt. 

Use of loan proceeds: any legitimate business purpose, including managing cashflow, growth and investment. 

Loan interest rate: The annual effective rate of interest and upfront and other fees cannot be more than 14.99%. 

Availability: Until 31 December 2021, subject to review. 

For more information, please go to the British Business Bank’s website here. 


Our comments: 

The RLS is another government initiative that is likely to be popular. It’s launch also ties in with non-essential retail and outdoor hospitality reopening this week. As the scheme can be used on top of support received from emergency schemes, it is clear the government are still working on providing support and complements the extension of the furlough scheme (until 30 September) to protect jobs 

Specialist legal advice 

If you would like assistance with the Recovery Loan Scheme or would like to discuss how COVID-19 has impacted your business, please get in touch today on 0117 906 9400 or email:





This guidance is correct as of 13 April 2021. 

Please note that in relation to the UK Government’s response to the ongoing coronavirus pandemic our advice is based on the UK Government’s announcements about changes it intends to make to the law. The situation regarding the pandemic and the UK Government’s response to it is changing fast and in consequence the content of any new or changed law may differ from that anticipated. 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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