Recovery Loan Scheme

What is the Recovery Loan Scheme?

The Recovery Loan Scheme (RLS) enables UK businesses of any size to access loans and other kinds of finance of up to £2m per business.

The funding can be used for any legitimate business purposes, including business growth and investment.

Like CBILS, the government will continue to guarantee 70% of the finance to the lender, however, personal guarantees can be taken at the lender’s discretion.

Businesses that have already received support under existing COVID-19 guaranteed loan schemes (such as CBILS and Bounce Back Loans) will still be eligible to access the RLS.

About the recovery loan scheme

Launched on 6 April 2021, the Recovery Loan Scheme (RLS) provides financial support to businesses across the UK as they continue to recover and grow following the coronavirus pandemic.

You can apply for a loan under the scheme if COVID-19 has affected your business and you need to 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 below, RLS is still accessible to you. The other schemes include:

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

However, the amount you have borrowed under an existing scheme may, in certain circumstances, limit the amount you can borrow under the RLS.

At the Autumn Budget in 2021, the government announced that the Recovery Loan Scheme will be extended to 30 June 2024.

From 1 January 2022, the following changes will come into force:

• The scheme will only be open to small and medium sized enterprises (turnover <£45m)
• The maximum amount of finance available will be £2 million per business (maximum amount per group limited to £6m)
• The guarantee coverage that the government will provide to lenders will be reduced to 70%

These changes will apply to all offers made from 1 January 2022.

Am I eligible for the recovery loan scheme?

To be eligible to receive a loan through the government’s Recovery Loan Scheme (RLS), you’ll need to meet the following criteria:

• Business has been impacted by coronavirus
• Minimum of 2 years’ trading history
• Business is trading in the UK
• Loan is for business purposes (i.e. working capital and investment or to support trading in the UK)

To help as many businesses as possible, funders will need to look at a business’s performance over a longer period of time to ascertain whether it has a viable business proposition, regardless of the impact of COVID-19.

What could I use a recovery loan scheme loan for?

You can use an RLS loan to help your business:

• Improve cash flow
• Grow your business
• Purchase equipment
• Pay a one-off cost
• Help with payroll
• Invest in marketing

Types of finance available

A lender can provide up to £2 million in the form of one of the following facilities:

• Unsecured loan
• Invoice finance 
• Hire purchase

How to apply for the recovery loan scheme

MAF Finance Group can compare finance offerings from a wide panel of lenders to find the best option for you.

If you would like to get a quote or need further information, simply fill in the form and we will contact you. If you want to speak to someone directly, you can call us on 0115 958 6872 and a member of our team will be happy to speak to you. Alternatively, email us at enquiries@maffinancegroup.co.uk.