The relaunch of the Recovery Loan Scheme: what has changed?

You might have heard that the Recovery Loan Scheme has recently been extended – but what has changed in the relaunch of the scheme and what does it mean for businesses? We’ll guide you through the new outlines, explain what the extended scheme is intending to achieve and talk about the eligibility criteria.

The original Recovery Loan Scheme (RLS)

In April 2021, the RLS was launched in an effort to support UK businesses in their recovery from the Covid-19 pandemic. The scheme was set to end in December 2021, however it was extended at the Autumn Budget of that year. The government provided a guarantee of 80% on eligible loans made before 1st January 2022 and 70% on those made after that date. This gave lenders confidence in continuing to provide finance to UK businesses, which enabled many businesses to continue trading. According to GOV.UK, the scheme has supported almost 19,000 businesses since April 2021 with an average of £202,000 in support.

You can read more about the original RLS in our previous blog article. 

What is happening to the Recovery Loan Scheme now?

On 20th July 2022, the government announced that the scheme has been extended and is offering Government-backed loans to small businesses for a further two years, until the end of June 2024. This is a major support for those struggling with the pressures of recovering from the pandemic. Businesses are able to choose from term loans, overdrafts, asset finance and invoice finance, however not all lenders will be able to offer all of these options.

Key features of the scheme:

  • Maximum loan provided is £2 million per business group. For Northern Ireland Protocol Borrowers, maximum loan is £1 million
  • Asset and invoice finance starting at £1,000 and term loans and overdrafts starting at £25,001
  • Businesses are not prevented from accessing this scheme if they previously took out a CBILS, CLBILS, BBLS or RLS facility prior to 30 June 2022, however, it may reduce the maximum amount available
  • For most borrowers, the extended scheme no longer requires a Covid-19 impact test. Businesses therefore do not have to confirm that they have been adversely affected by Covid-19.
  • The borrower remains 100% liable for debt. The government is guaranteeing 70% of the finance to the lender
  • Term loans and asset finance facilities are available from 3 months – 6 years, and overdrafts and invoice finance are available from 3 months – 3 years
  • The annual interest rate and upfront and other fees cannot be more than 14.99%

Who will be eligible to access the extended Recovery Loan Scheme?

The scheme is open to businesses who meet the following criteria:

  • Turnover less than £45 million
  • Based and trading in the UK. For most businesses, they will need to be generating more than 50% of their income from trading activity
  • Can demonstrate that they have the ability to repay the facility
  • Can provide written confirmation that upon receiving RLS benefits, the business will not exceed the maximum amount of subsidy they are permitted to receive. This can be calculated here:
  • The business is not categorised as a business in difficulty. This includes not being in relevant insolvency proceedings


The government has announced that applications for the relaunched RLS will open in August 2022. If you would like to receive some tailored advice on how the scheme could benefit your business and if you could be eligible, please contact our Corporate Finance Manager, Holly Andrews.

Email: [email protected]

Phone: 02476 306029

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