Recovery Loan Scheme

The Recovery Loan Scheme

Business Support

The Government announced the Recovery Loan Scheme on 3 March 2021 within 2021/2022’s budget. The Recovery Loan Scheme is a new debt finance programme which launched on 6 April 2021. The programme is scheduled to run until 31 December 2021, subject to review.

The previous schemes, Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS) will close on 31 March 2021.

The new scheme aims to help businesses affected by Covid-19 and can be used for any legitimate business purpose, including managing cashflow, investment and growth. It is designed to appeal to businesses that can afford to take out additional debt finance for these purposes.

Unlike the other loan schemes, interest and fees are to be paid by the business from the outset and businesses will be required to meet the costs of interest payments and any fees associated with the facility.

  • The maximum value of a facility provided under the scheme will be £10m per business. Minimum facility sizes vary.
  • There will be no turnover restriction for businesses accessing the scheme.
  • Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities.
  • Term loans and asset finance facilities are available for up to six years, with overdrafts and invoice finance available for up to three years.
  • Businesses who have taken out a CBILS, CLBILS or BBLS facility will be able to access the new scheme, although the maximum they are allowed to borrow will depend on their lender’s assessment and scheme requirements.
  • Lenders will be required to undertake credit and fraud checks for all applicants. When making their assessment, lenders may overlook concerns over short-term to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.

Once received, the finance can be used for any legitimate business purpose, including growth and investment.

The government guarantees 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses.

Because they are government backed they will be more accessible than traditional funding with the lender more willing to provide the fund.

Further information on the Recovery Loan Scheme will be made available on the British Business Bank website (see below) and loans will be available through a network of accredited lenders, whose names will be made public in due course.


If you would like further information on other matters announced at the budget and would like further information regarding how these changes may affect your business, please view our blog on the 2021/2022 budget here.

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