The Recovery Loan Scheme Returns

Johnson Reed
2m read
Recovery loan scheme

More information has been released on the new version of the Recovery Loan Scheme that will become available within the coming weeks.

The scheme will be supporting facility sizes of up to £2 million outside of Northern Ireland, and £1 million within NI.


Key Features

  • Up to £2 million facility per business group
  • Wide range of products to choose from: term loans, overdrafts, asset finance and invoice finance.
  • Term length: Term loans and asset finance facilities available from three months up to six years. Overdrafts and invoice finance available from three months up to three years
  • Access to multiple schemes – If you have utilised a previous scheme (CBILS, CLBILS, BBLS or RLS) then you can still utilise the new scheme
  • Personal Guarantee: PG’s can be taken at the lender’s discretion, in line with their existing commercial lending practices.
  • Pricing: The annual effective rate of interest and upfront and other fees cannot be more than 14.99%
  • Decision-making delegated to the lender: Recovery Loan Scheme-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.
  • Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.


Eligibility criteria include:

  • Turnover limit: The scheme will be open to smaller businesses with a turnover of up to £45 million.
  • UK-based: The borrower must be carrying out trading activity in the UK.
  • No COVID-19 impact test required: Unlike the previous iteration of the scheme, for most borrowers there is no requirement to confirm they have been affected by COVID-19.
  • Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of COVID-19.
  • Business in difficulty: The borrower must not be a business in difficulty, including not being in collective insolvency proceedings.