Recovery Loan Scheme (RLS)

About The Scheme

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

You can apply to the scheme if Covid-19 has affected your business. You can use the finance for any legitimate business purpose – including managing cash-flow, 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 – namely:

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

RLS is still open to you, although the amount you have borrowed under an existing scheme may in certain circumstances limit the amount you may borrow under RLS.

RLS will run until 31 December 2021, subject to review.

How it works


The Recovery Loan Scheme will initially be available through a number of Lenders accredited by the British Business Bank. New lenders under the scheme will be listed on the British Business Bank website as they become accredited.

A key aim of the Recovery Loan Scheme is to improve the terms on offer to you, but if a lender can offer you the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.

It is advised that when looking to borrow, you should first approach your own finance provider. You may also consider approaching other lenders if you’re unable to access the finance you need. There are also experienced and knowledgeable brokers such as Orchard Business Finance who can help you navigate this process.

Types of finance

A lender can provide up to £10 million as one of the following facilities:

  • Term loan
  • Overdraft
  • Invoice finance
  • Asset finance


RLS gives the lender a government-backed guarantee against the outstanding balance of the facility. As the borrower, you are always 100% liable for the debt.

If you’re borrowing £250,000 or less

  • The lender won’t take any form of personal guarantee.

If you’re borrowing more than £250,000

  • The lender has the discretion to decide whether to take personal guarantees. However:
  • Above £250,000, the maximum amount that can be covered under RLS is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied
  • No personal guarantees can be held over Principal Private Residences.

How Much Can You Borrow

Working Out the Maximum You Can Apply For…

i. 2 x Annual wage bill as evidenced by 2019 Accounts. (Where the case of wage undertakings created on or after 1 January 2019, the maximum loan must not exceed the estimated annual wage bill for the first two years in operation).

ii. 25% of 2019 turnover as evidenced by 2019 Accounts.

iii. Estimation of Working Capital/Investment costs required for the forthcoming 18 months. (if your business employs over 250 employees, then this is only required for the forthcoming 12 months)

When calculating these figures, it is the smallest amount that you can apply for. As an example:

XYZ Ltd have an annual wage bill of £65,000 (2 x £65,000 = £130,000)
Annual turnover for XYZ Ltd in 2019 Accounts is £400,000 (25% = £100,000)
Estimated working capital/investment costs required = £250,000

In this example, the MAXIMUM that ABC Ltd could apply for under the Recovery Loan Scheme is £100,000


For further information and an informal conversation phone today on 01257 543013.

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