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Apply for the Recovery Loan Scheme

The Recovery Loan Scheme (RLS) has now replaced the government’s CBILS and Bounce Back programmes, which have helped thousands of businesses through the pandemic. 

From financing new equipment to covering the costs of reopening, recovery loans could provide another boost to reopening businesses as they look to adapt and grow.

Read on to the get key details about the new scheme – along with answers to common questions. 

How does the Recovery Business Loan scheme work?

Businesses can choose from a variety of products, including term loans, overdrafts, asset finance and invoice finance facilities. Term loans and asset finance are available for up to six years, with overdrafts and invoice finance available for up to three years.

There’s some similarities with CBILS, in that the government guarantees 80% of the finance, but with RLS there’s no interest or fee-free period and repayments start immediately. Businesses can borrow from £25,000 to £10m and personal guarantees still aren’t needed for loans under £250,000.

When does the Recovery Business Loan open for applications?

The new scheme launched on Tuesday 6 April and is open until 31 December, subject to review.

Who is eligible to apply for the loan?

The Recovery Business Loan scheme aims to help businesses impacted by the pandemic. It can be used for any legitimate business purpose, including managing cashflow, investment and growth. 

You will be able to apply for a loan if your business is trading in the UK. You will need to show that your business is viable (or would be viable were it not for the pandemic), has been affected by the pandemic and is not in collective insolvency proceedings.

Businesses from any sector will be eligible to apply, except banks, building societies, insurers and reinsurers (but not insurance brokers), public-sector bodies and state-funded primary and secondary schools. 

Some lenders will have their own criteria, which may differ slightly from the government’s criteria. These include the providers we’re working with, Starling Bank and Funding Circle, who are offering RLS loans of up to £350,000. 

With these lenders, your business needs to have been trading for at least two years, with a minimum turnover of £100,000 in your 2019 accounts.

How much can I borrow?

You can apply for term loans and overdrafts between £25,000 and £10m per business. Invoice finance and asset finance will also be available between £1,000 and £10m per business.

What can I use an RLS loan for?

There’s a whole range of activities that a government-backed RLS loan could help fund. Here’s a few common ones:

  1. Upgrading equipment: From stock to vehicles to machinery, you could use a loan or asset finance agreement to grow your business, without spending a lot of money up-front.
  2. Top-up existing funding:If you’ve taken out a CBILS or Bounce Back loan, you might use the Recovery Loan Scheme to refinance existing funding and borrow more.
  3. Invest in digital capabilities: You could use a recovery loan to invest in your businesses’ digital offering, reach customers online and start making money in new ways.
  4. Cover the costs of making your business Covid-safe: Redesigning your workplace to be safe for customers and staff can be costly. As more businesses reopen and Covid-secure guidelines remain in place, an RLS loan could help you make the most of the new rules

Can I apply for the Recovery Loan Scheme if I’ve had CBILS or BBLS support?

If you’ve received support under the existing government-backed loan schemes, you will still be eligible to access finance under this scheme, if your business meets all other eligibility criteria.

The maximum you can borrow will depend on their lender’s assessment and scheme requirements.

What lenders are taking part in the scheme?

New lenders under the scheme will be listed on the British Business Bank website as they become accredited. These are the lenders who have been announced so far.

What’s the difference between the Recovery Business Loan and CBILS?

The main differences between the new Recovery Loan scheme and CBILS are the amount you can borrow and when you start paying.  

With CBILS you can borrow up to up to £5m and the government pays the interest and fees for 12 months. With Recovery Business Loans you can borrow up to £10m, but you have to pay interest and fees from the outset.

Do you need funding now?

If you’re a small business owner looking for funding, find funding options below in just 30 seconds. Simply enter your business name.

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