Government-backed loans for Covid recovery

Compare Recovery Loan Scheme business loans today

The Recovery Loan Scheme offers government-backed financial support. Compare loans with our business finance division Think Business Loans.

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What is the Recovery Loan Scheme?

The Recovery Loan Scheme (RLS) offers government-backed financial support for UK businesses looking for finance to recover or expand following the pandemic. If your business has been affected by Covid-19, you can apply for funding that can be used to cover a range of business costs including cash flow, growth and investment.

What businesses are eligible for the Recovery Loan Scheme?

The Recovery Loan Scheme is available to businesses that have seen their trading affected by the coronavirus pandemic. You can apply for a loan under the scheme so long as your business is trading in the UK and meets the following conditions:

  • The coronavirus pandemic had an impact on its ability to operate
  • It would be viable were it not for the pandemic
  • It's not in collective insolvency proceedings (unless your business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply)

There are no restrictions on turnover, which means you can apply no matter how much money your business makes. And you can still apply even if you’ve already taken out government-backed support including Bounce Back Loans, CBILS, CLBILS, or the Future Fund. But if you have an outstanding debt with any of these schemes, this could affect the amount you can borrow.

Your business won’t be eligible for a loan under the Recovery Loan Scheme if it falls into any of the following categories:

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

How to apply for a Recovery Loan Scheme loan

To compare business loans available via the Recovery Loan Scheme, speak to the team at Think Business Loans, the business finance division of Bionic. Applications are open until June 30, 2022.

Once we've helped you to find a lender, you'll need to complete a short online application to self-certify that your business is eligible for a loan under the terms of the scheme.

If your business is eligible, your lender will then carry out full checks for fraud and Anti-Money Laundering (AML). A full Know Your Customer (KYC) check will also be carried out to verify your identity.

With those checks complete, the lender will then decide whether to lend to you. You may be offered a different type of loan id the lender can find a finance option that has better terms than one you might be offered under the terms of the scheme.

You might also be offered a different type of business loan if your application is turned down. If not, you can apply to another lender, but making multiple applications could affect your credit score.

As with any type of business loan from a responsible lender, you’ll need to be able to prove your business is able to repay the money you borrow, plus interest, when you apply for an RLS loan.

This means your lender could ask for one or more of the following as proof of the loan’s affordability:

  • A business plan
  • Records of your profit and loss, cashflow, and other business accounts
  • Business forecasts
  • Accounts to show the previous year’s trading
  • Details of any assets owned by your business
  • Details of any other business borrowing

Your lender might also ask for more information on your personal finances, including any personal loans, mortgages, overdrafts and credit cards.

You might also be charged an arrangement fee by the lender. You’ll need to cover the cost of this fee, unlike on Bounce Back Loans, where these charges were covered by the government.

Are Recovery Loan Scheme Loans secured loans?

Recovery Loan Scheme loans are secured by the government, which means you don’t need to offer a personal guarantee when applying for a loan. Even so, you are 100% liable for the repayment of that loan.

If you’re borrowing more than £250,000, your lender can ask for a personal guarantee, but you can’t offer your own home as a personal guarantee. The lender can only use this personal guarantee to recover a maximum of 20% of the amount you owe after the proceeds of all other available collateral have been taken, such as other business assets.

How does the government guarantee a Recovery Loan Scheme loan?

To help make Recovery Loan Scheme loans available to more businesses, the government guarantees 80% of the finance to the lender. This offers lenders more security as the government guarantees that they’ll get most of the money back if a business can’t repay the loan.

These loans are provided by private lenders - not the government - and, as the borrower, you are 100% liable for the debt. Missing repayments or defaulting on a Recovery Loan Scheme loan will affect your credit score and could lead to problems getting credit in the future.

Recovery loans

What is the Recovery Loan Scheme?
What businesses are eligible for the Recovery Loan Scheme?
How to apply for a Recovery Loan Scheme loan
Are Recovery Loan Scheme Loans secured loans?
How does the government guarantee a Recovery Loan Scheme loan?

Compare recovery loans with our finance division Think business loans

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Recovery Loan Scheme FAQs

To help you understand more about the Recovery Loan Scheme, here are the answers to some of our most frequently asked questions.

Several types of business loans are available under the Recovery Loan Scheme, including:

  • Asset finance
  • Invoice finance
  • Overdraft
  • Term loan

Under the Recovery Loan Scheme, term loans or overdrafts are available for borrowing between £25,001 and £10 million per business. Invoice finance and asset finance is available for amounts from £1,000 to £10 million per business.

The length of the loan depends upon the type of finance you apply for. Business overdrafts and invoice finance facilities are available for up to three years, while term loans and asset finance facilities can be taken out over six years. Unlike a Bounce Back Loan, which deferred repayments for 12 months, you’ll need to start repaying the loan straight away.

Applications for the Recovery Loan Scheme are open until June 30, 2022.

Interest rates are capped at 15%, but the amount of interest you pay will depend on the amount you borrow, the type of loan you take out, the lender you go with, and your current circumstances.

Personal and business credit ratings won't affect your eligibility, but your lender might register your Recovery Loan with the credit reference agencies. This means a record will be held on your credit file and your credit rating might be affected by any late repayments or failure to pay.

How Recovery Loan Scheme comparison works with Bionic and Think

How Bionic Works

You tell us how much
you need to borrow

Let the team at Think know how much you need to borrow and what you’ll use the finance for. They’ll use smart data to find out more about your business.

How Bionic Works

We compare secured business
loans and lenders

The team at Think will compare Recovery Loans from a panel of providers – including high street banks and alternative lenders - to find the right finance for your business.

How Bionic Works

We’ll take care of your

You then choose the loan you want. Think’s tech-enabled team will answer any questions you have and help with the application to improve your chances of approval.

Your Think comparison is free.

If you take out a loan, we'll be paid a commission by the lender that is included in the rates we quote.