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Apply for the Recovery Loan Scheme

The government’s coronavirus loan schemes, Bounce Back and CBILS, were replaced by the Recovery Loan Scheme on Tuesday 6 April.

It’s still early days, but we’ve summarised everything we know about the new scheme below.  

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.

The government will guarantee 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses. There is no interest or fee-free period, so businesses will have to start paying interest and any fees associated with what they borrow immediately.

No personal guarantees will be taken on facilities up to £250,000, and a borrower’s principal private residence cannot be taken as security. There are no turnover requirements or trading history requirements.

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. 

How much can I borrow?

You can apply for term loans and overdrafts between £25,001 and £10m per business. Invoice finance and asset finance will also be available between £1,000 and £10m per business.

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.

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