What You Need to Know About the Recovery Loan Scheme

• What is the Recovery Loan Scheme?
• Eligibility
• RLS accredited lenders.
• Where can I find further information about RLS?

The Recovery Loan Scheme (RLS) was introduced in April 2021 as a government-backed loan scheme to support access to finance for UK businesses as they look to invest and grow.

In August 2022, it was announced that the scheme, which is administered by The British Business Bank on behalf of the Secretary of State for Business and Trade, would continue to run until June 2024 to help businesses handle the pressure of rising costs.  

Details on the new iteration of the RLS were announced as Phase 3 (or 3.0) which is available even if a business has previously taken advantage of RLS, CBILS (Coronavirus Business Interruption Loan Scheme), CLBILS (Coronavirus Large Business Interruption Loan Scheme) or BBLS (Bounce Back Loan Scheme).

RLS Eligibility

• Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m.
• UK-based: The borrower must be carrying out trading activity in the UK.
• Difficulties: The business must not be in difficulty (including not being in relevant insolvency proceedings.)
• Covid-19 Impact Test: For most borrowers there is no requirement to confirm they have been affected by Covid-19.
• Viability Test: The lender must consider that the borrower has a viable business proposition, but it may disregard any concerns over short-to-medium term business performance due to the uncertainty and impact of Covid-19.
• Subsidy limits: Written confirmation will need to be provided in receipt of the RLS to confirm that it will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive.

What type of businesses are eligible?

• Sole traders
• Corporations
• Limited partnerships
• Limited Liability Partnerships (LLP)
• Co-operatives and community benefit societies
• Any other legal entity carrying out business activity in the UK.

Banks, building societies, insurance companies, public-sector bodies and state funded primary and secondary schools are not eligible.

Further information on eligibility can be found here.

RLS Accredited Lenders

A list of accredited lenders who can facilitate the scheme can be found on the British Business Banks website: Recovery Loan Scheme: current accredited lenders - British Business Bank (british-business-bank.co.uk)

It is worth noting that some lenders that offered facilities under the previous iterations of the scheme between April 2021 and June 2022 may not still be accredited to offer the scheme from August 2022.

Further information about the scheme including eligibility, the application process, frequently asked questions, information about subsidies and comparisons to previous schemes can be found on the British Business Bank website.

Further Information

Further information about the scheme can be found on our blog here.

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