Compare Recovery Loan Scheme business loans today

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

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 December 31, 2021, subject to a review.

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.

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.

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.