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If you are a Director of a company or an individual in need of additional finance then the Recovery Loan Scheme could be an option. Oliver Elliot can help you address your concerns so get in touch.

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Covid-19 Business Support

The Recovery Loan Scheme aims to assist businesses affected by the Coronavirus Pandemic. It can be used for any proper commercial business use, such as managing cashflow, investment and growth. Targeted to help businesses that can afford to take on further debt finance for such purposes.

What Is the Recovery Loan Scheme?

In the Budget on 3 March 2021, the Government announced that the Recovery Loan Scheme. This is a brand new debt finance scheme. It said that it would commence on 6 April 2021. The Recovery Loan Scheme is intended to last until 31 December 2021.

The Recovery Loan Scheme is to be made available to help businesses of any size to access loans and other forms of finance up to £10 million per business from 6 April 2021.

In effect the Recovery Loan Scheme will superseded the current COVID-19 loan schemes when they close, in particular the Bounce Back Loan Scheme.

The aim is that it will provide much need financial support to keep companies afloat whilst they embark upon their recovery and look to grow following the devastating impact of Covid-19 on the UK economy.

The Recovery Loan Scheme finance can be used for any proper business uses, such as growth and investment.

The government will guarantee 80% of the finance to the lender to ensure they continue to have the confidence to lend to businesses and do not fear being left out of pocket upon taking the risk associated with such loans.

The scheme will launch from 6 April and then remain open until 31 December 2021 in the first instance. Loans will be available through a range of lenders, whose names will be published by the government in due course.

What Type Of Finance Is Available?

Loans over a period of time as well as overdrafts will form part and parcel of the Recovery Loan Scheme. Such loans will be available between £25,001 and £10 million per company or business.

Invoice finance and asset finance will also be available in the range of £1,000 and £10 million per company or business.

The term of the finance to be made available will be up to 6 years for loans and asset finance options. Overdrafts and invoice finance options will be available for up to 3 years.

Crucially what will come as no doubt a welcome relief to many business owners, there will be no personal guarantees sought on loans and other facilities available under the Recovery Loan Scheme for amounts up to £250,000. In addition, the home or main property of the borrower cannot be used as security by the lender.

Businesses will however be required to meet the costs of interest payments and any fees associated with the facility.


You will be able to apply for a loan if your company or business:

  • is trading in the UK

You will need to show that your business:

  • is viable or would be viable were it not for Covid-19
  • has been affected by Covid-19
  • is not in some form of insolvency proceedings already or presumably on the verge of them.

Business that have received support under the existing COVID-19 guaranteed loan schemes will still be able to apply for finance under the Scheme, provided they meet all other requirements.

There will be no turnover restriction for businesses accessing the scheme.

Lenders will be have to undertake credit checks and fraud reviews for all applicants. When considering their view on a businesses’ suitability for the Scheme, lenders may overlook concerns over a change in trading performance owing to Covid-19.

Who Cannot Apply

Businesses from any sector will be eligible to apply, except:

  • banks, building societies, insurers and reinsurers
  • public-sector bodies
  • state-funded primary and secondary schools

Personal Guarantees Required For The Coronavirus Recovery Loan Scheme

Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be covered under The Coronavirus Recovery Loan Scheme is capped at a maximum of 20% of the outstanding balance of the The Coronavirus Recovery Loan Scheme facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.

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If you have any questions in relation to Recovery Loan Scheme then Contact Us as soon as possible for advice. Our expertise is at your fingertips.

Disclaimer: Recovery Loan Scheme

This page is not legal advice and should not be relied upon as such. This article is provided for information purposes only. You can Contact Us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.

Further information is available on the Recovery Loan Scheme webpage of the government.