The Recovery Loan Scheme is to be launched from 6 April 2021 and will run through to 31 December 2021 to provide continued support to UK businesses as they look to recover from the damage caused by the COVID-19 pandemic.

This scheme will effectively replace the existing COVID-19 loan schemes, which are due to close at the end of March.  The UK Government will guarantee 80% of the finance to lenders.

Key Points:

  • Up to £10m is available to be accessed dependent on eligibility.  Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.
  • There is no turnover restriction for businesses accessing the scheme.
  • Businesses will be able to choose from a variety of products: term loans, overdrafts, asset finance and invoice finance facilities.
  • Finance terms will be up to 6 years for term loans and asset finance, and up to 3 years for overdrafts and invoice finance facilities.
  • Businesses will be required to meet the costs of interest payments and any associated fees from the outset – there will be no holiday periods, unlike the current schemes in place.
  • Businesses who have taken out a CBILS or a BBLS loan facility will also be able to access the new scheme, although the maximum they will be allowed to borrow will depend on their lender’s assessment and scheme requirements.
  • Lenders will be required to undertake credit and fraud checks for all applicants.  When making their assessment, lenders may overlook concerns over short-to-medium term performance owing to the pandemic.  The checks and approach may vary between lenders.
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