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Applications now open for new iteration of the Recovery Loan Scheme

It was announced last month that the UK Government in association with the British Business Bank would relaunch their financial support via a new iteration of the Recovery Loan Scheme. The aim of the Scheme is to help smaller businesses access finance they may not have had access to commercially on equivalent terms, during this unstable period of post-pandemic recovery and economic uncertainty.

Applications opened earlier this month and close on 30 June 2024.

What is the eligibility criteria?

The following criteria must be satisfied in order to be eligible:

  • Location – businesses must be based in the UK
  • Size – the facility is available to small businesses with a maximum turnover of £45 million
  • Viability – lenders will look to identify that the borrower has a viable business proposition, but may disregard concerns over small to medium term business performance in light of the Covid-19 pandemic
  • Borrowers must not be a ‘business in difficulty’, nor be engaged in relevant insolvency proceedings
  • Lenders will be required to certify that they would not have been able to offer a facility to the business on their normal commercial terms, or that they would have only been able to do so at a higher interest rate.
  • Lenders will conduct their usual anti-money laundering and know your customer checks as required under the scheme.

Unlike the previous support scheme, borrowers no longer need to confirm that they have been financially impacted by the Covid-19 pandemic.

How much can I borrow?

Lenders can offer facility sizes of up to £2 million per business (£1 million for borrowers in the scope of the Northern Ireland Protocol*). As a Government-backed business support initiative, any financial assistance is treated as a subsidy and therefore subject to limits over any rolling three-year period. Some lenders are operating a minimum facility size policy.

How long can I borrow over?

Term lengths can vary from three months to a maximum of six years.

Do I need a personal guarantee?

Unlike the first round of RLS, personal guarantees can now be taken at the lenders’ discretion (for facilities exceeding £250,000), in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security.

How much does it cost?

The annual effective interest rate and upfront and other fees cannot be more than 14.99%

How much of the loan is guaranteed by the government?

The government will provide a 70% guarantee to the lender. The borrower will always remain 100% liable for the debt.

How do I apply?

As with the previous Recovery Loan Scheme, loans are being administered via accredited lenders. You can view the most up to date list of accredited lenders on the British Business Bank website here> Recovery Loan Scheme: current accredited lenders – British Business Bank (

When can I apply?

Applications to the new recovery loan scheme opened on 1st August and will turn through to 30th June 2024.

What can I use the funds for?

Businesses can use the finance for any legitimate business purpose, for example, managing cashflow, investment and growth, providing the facility is used to support trading in the UK and not to support certain export related activities.

I’ve previously had financial support via CBILS and RLS – can I still apply?

Yes, subject to subsidy limits.

Who is not eligible to apply?

  • Banks, building societies, insurers and re-insurers (not including insurance brokers)
  • Public sector bodies
  • State funded primary and secondary schools.

Can we help?

If you have any questions regarding the Recovery Loan Scheme or would like to discuss any other financial issue, you shouldn’t hesitate to contact your engagement partner or another member of the Mitchell Charlesworth team.

*Unless they operate in a sector where aid limits are reduced, then the maximum facility is subject to a lower cap i.e. agriculture, fisheries, aquaculture and road freight haulage.

Written 24 August 2022.

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