The pandemic has been a tough time for UK businesses, with sales down, revenues cut and cashflow on a precarious knife-edge.


To help support UK businesses through this difficult period, the Government offered the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan (BBL) schemes. But with both of these schemes now closed, what financial support is available?


The main route to government-backed finance is now the Recovery Loan Scheme– which was introduced in March 2021 and runs until 31 December 2021.


Who is eligible for the Recovery Loan Scheme?


The Recovery Loan Scheme (RLS) is aimed primarily at businesses which are viable in the market, but that are struggling to recover and grow due to Covid-19. Funding of up to £10million is available to eligible businesses that can meet the conditions for making an RLS claim.


Your business must:


  • Have been negatively impacted by the Covid-19 pandemic
  • Be trading in the UK (more than 50% of turnover)
  • Be a viable business proposition, going forward.


A chance to boost your working capital


If you meet the RLS criteria, this is an excellent opportunity to borrow money on very attractive terms and to bring additional work capital back into the business. Facilities are available as asset finance, invoice finance, overdrafts or term loans.


  • Within the £10 million, the maximum for an individual business is:
    • Double 2019 (or latest year available) wage bill
    • 25% of 2019 turnover
    • 12 months (18 months for SME’s) forecast liquidity requirements


  • The lender can choose which of the three sub-maximums to apply. Existing CBILS (but not BBL) advances come off the sub-maximum.
  • The minimum loan and maximum term depends on the type of facility taken out:
    • Asset Finance £1,000 / max 6 years
    • Invoice Finance £1,000 / max 3 years
    • Overdraft £25,001 / max 3 years
    • Term Loan £25,001 / max 6 years


  • The RLS is offered by a range of different approved lenders and each lender will determine the specific interest rates and applicable fees (taking into account the benefit of the government guarantee).
  • The Government guarantees 80% of the loan. Personal guarantees (PGs) are not allowed for facilities below £250K. Above £250K, PGs can be required but can’t include your private residence and are capped at 20% of any shortfall after any business assets sold in event of default.


Opening up a new route to funding


Bringing extra capital into the company helps to secure your long-term recovery. The funding you receive via the RLS can be used for general cashflow management, investment in the business or for growth purposes, making it a very flexible way to inject cash into the business.


  • Because there is a government guarantee of 80%, lenders should be able to offer better terms than would otherwise be available.
  • Lenders are more likely to offer loans where the decision is marginal without the guarantee, but will still be open to taking a small amount of risk. For businesses that may not have previously met the criteria for a business loan, the RLS is a golden opportunity to access much-needed capital at this important time.


Lenders are highly likely to require some form of business plan or projection before approving any facilities. We’re ideally placed to help you prepare financial projections and to provide the accounts, cashflow forecasts and background information that a lender will want to see.


Come and talk to us about the Recovery Loan Scheme and your financing requirements in general. We’ll support your applications and will help you to manage your funding needs.



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