Recovery Loan Scheme: how to apply for government-backed loan for businesses - and list of approved lenders

The scheme is administered by the British Business Bank with interest rates capped at 14.99 per cent

Thursday, 8th April 2021, 11:24 am

A government-backed loan scheme which aims to provide additional finance to businesses that need it due to the ongoing Covid pandemic has recently launched.

But what is the Recovery Loan Scheme (RLS), how will it help and who is eligible to apply?

Here’s what you need to know.

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The scheme is administered by the British Business Bank with interest rates capped at 14.99 per cent (Photo: Shutterstock)

What is the Recovery Loan Scheme?

The new loan scheme has been launched in order to provide further support to protect businesses and jobs.

The loans will include 80 per cent government guarantee and an interest rate cap of 14.99 per cent, with the aim of ensuring that businesses continue to benefit from Government-guaranteed finance throughout 2021.

The scheme - which was first announced at the Budget - will run until 31 December 2021 and will be administered by the British Business Bank.Loans will be available “through a diverse network of accredited commercial lenders,” Chancellor Rishi Sunak said.

The RLS can also be used as an additional loan on top of support received from the emergency schemes put into place last year, such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme.

The new loan scheme is also in addition to furlough, which has been extended until 30 September, as well as the New Restart Grants scheme, which provides funding of up to £18,000 to eligible businesses.

Mr Sunak added: “As we safely reopen parts of our economy, our new Recovery Loan Scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.”

Who can access the loans?

Businesses ranging from coffee shops and restaurants, to hairdressers and gyms are able to access loans varying in size from £25,000 up to a maximum of £10 million.

Invoice and asset finance is also available from £1,000.

According to the British Business Bank, you can apply to the Recovery Loan Scheme if Covid 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,” the bank adds.

If your business has already borrowed from any of the other coronavirus loan schemes, including the Bounce Back Loan Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), and the Coronavirus Large Business Interruption Loan Scheme (CLBILS), then the Recovery Loan Scheme is still open to you, but the amount you have borrowed under an existing scheme may, in certain circumstances, limit the amount you may borrow under the new scheme.

Suren Thiru, Head of Economics at the British Chambers of Commerce, said: “Accessing finance remains crucial to the lifeblood of a business and so the launch of the Recovery Loan scheme is welcome. The new scheme can play a potentially pivotal role in supporting the recovery by getting credit flowing to the firms who most need it.

“Chambers of Commerce will continue to work with government and the banks to ensure that businesses have the clarity they need to enable them to use the new scheme to help them return to growth.”

How do I apply?

To apply you must first choose an RLS accredited lender. You can then approach a lender, ideally via its website.

It’s worth noticing that not every accredited lender can provide every type of finance available under RLS, and the amount of finance offered varies between lenders.

Accredited lenders include:

- Aldermore

- Arbuthnot Latham

- Bank of Scotland

- Barclays

- Clydesdale Bank

- Dankse Bank

- Ebury


- Lloyds Bank

- NatWest

- OakNorth Bank

- Paragon

- Santander

- SecureTrust Bank

- Skipton Business Finance


- Ulster Bank

- Yorkshire Bank

For further information or to look into the application process, visit the British Business Bank website.

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