Recovery Loan Scheme: Government-backed funding

JPM Capital can help broker Recovery Loan Scheme's to businesses affected by the coronavirus

Recovery Loan

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What is the recovery loan scheme?

The Recovery Loan Scheme (RLS) is a Government-backed loan designed to help businesses that have been affected by the coronavirus pandemic. The scheme was implemented on the 6th April 2021 following the Spring Budget announcement at the start of March.

tax funding


How does the recovery loan scheme work?

The recovery loan scheme is a government-backed loan that has been developed as a replacement for the existing coronavirus loan schemes (CBILS; CLBILS; BBLS).

Is interest charged on the recovery loan scheme?

Yes, interest will be charged on the RLS. Unlike CBILS, the government will not pay the first 12 months of interest for the loan. This means that the business will be required to pay interest on the loan from the start in addition to any lenders fees. The borrower remains liable for 100% of the debt.

Who is eligible for the recovery loan scheme?

In order to be considered eligible for the recovery loan scheme, you need to meet the minimum eligibility criteria:

  • The business must be trading in the UK.
  • You need to show that your business would have been operating normally if it wasn’t impacted by the pandemic.
  • You need to show that your business has been affected by the virus.
  • Your business is not part of insolvency proceedings.

Businesses from any sector are eligible to apply for a loan, apart from a select few which are named in the next section.

Who cannot apply for the recovery loan scheme?

Any business from any industry can apply for RLS. However, there is a small list of businesses set out by the government that cannot apply for the RLS facility, these include:

  • Banks & Building Societies
  • Insurers and reinsurers (Insurance brokers are permitted to apply for the RLS).
  • State-funded primary and secondary schools.

When does the recovery loan scheme run out?

The recovery loan scheme is set to run until 31 December 2021. However, the deadline set by the Government will be subject to review.

Is the recovery loan scheme replacing CBILS?

Yes, the Recovery Loan Scheme replaced CBILS as of the 6th April 2021. The Recovery Loan Scheme also replaced the Coronavirus Large Business Interruption Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS).

What is the difference between RLS and CBILS?

Below is a table looking at the basic differences between RLS and CBILS. 

How much can be borrowed? £50,000 – £5 million Up to £10 million
How long can a repayment plan be? Up to six years Up to six years
Will the Government pay the first 12 months of interest? Yes No
Do I have to sign a personal guarantee? Not on loans up to £250,000 Not on loans up to £250,000
How long do I need to have been trading for? 1 – 2 Years No minimum requirement
What does my annual turnover need to be? No minimum requirement No minimum requirement

For a more detailed list of the details regarding the recovery loan scheme, please check out the British Business Banking website.

Can I apply for the recovery loan scheme if I have already applied for CBILS?

Yes, you can receive access to the new scheme (RLS)  if you have previously borrowed from a CBILS, CLBILS or BBLS facility. However, the British Business Bank PLC does state that if a business previously applied for a scheme, there may be some limitations on the amount that can be borrowed.

What can I use the recovery loan scheme for?

The recovery loan scheme can be used by businesses for genuine investment purposes. Genuine investment can include managing cash flow, investment into areas of the business, or helping with growth.

Businesses need to afford the loan to help finance investment, including paying interest and lenders fees. Businesses that take out the RLS are 100% responsible for the accrued debt, which can be a risk for businesses that have been deeply impacted by COVID-19.

What are the main features of the Recovery Loan Scheme?


At the moment, there are a limited amount of lenders that have been accredited to provide the RLS to businesses. However, more lenders will become accredited in due course as the rollout of the RLS grows. Only accredited lenders can provide RLS to businesses in the UK.

Finance Options

The RLS allows businesses to borrow up to £10 million from a number of financial facilities. These financial facilities let businesses choose a facility that is best suited to their situation.  The finance facilities that are on offer include:

  • Term loan
  • Overdraft
  • Invoice finance 
  • Asset finance

It should be noted that different facilities may have a minimum borrowing requirement.

Rules on Personal Guarantees

The rules for personal guarantees vary depending on the amount of money your business is looking to borrow. We have outlined the rules below:

  • Borrowing £250,000 or less: The lender does not need to take a personal guarantee out on the lending facility that you apply for. 
  • Borrowing over £250,000: Lenders can independently decide whether the business needs to sign up for a personal guarantee.

How can I apply for the recovery loan scheme?

The recovery loan scheme is only available from lenders that have been accredited by the British Business Bank. At JPM Capital, we are able to help broker the recovery loan scheme as we work with partners who have been accredited to do so.

If you have any questions and want to learn more about RLS, do not hesitate to give us a call on 01244 207276. Our experienced account managers are happy to guide you through the details of the recovery loan scheme and any concerns you may have.

Alternatively, you can use the contact form found at the bottom of the page and our account managers will look to be in contact as soon as possible.

What are the alternatives to the recovery loan scheme?

An alternative to the government loan scheme is the Self-Employed Income Support Scheme (SEISS). This scheme provides grants for self-employed business owners who have been impacted by the coronavirus pandemic. This scheme is only available to self-employed businesses. To learn more about SEISS, go to the government website. 

Alternatively, there are commercial options available which a business may want to consider. At JPM Capital, we can help broker a variety of commercial facilities thanks to the diverse range of partners we work with. Financial products we can help broker include:

Why choose JPM Capital Limited?

JPM Capital is a UK-based business credit brokerage. Based in Chester, we help businesses across the UK find the funding that they need. We work with many trusted partners which allows us to broker a variety of financial products.

JPM Capital is authorised and regulated by the Financial Conduct Authority, which ensures that we meet the correct and compliant practices. JPM Capital is also a proud member of the National Association of Commercial Finance Brokers. As a member of the NACFB, we are always up to date with the most recent industry developments.

Paul is calm, thoughtful and positive during a period where so many businesses are in panic. I am thankful for his and JPM's continued support and will continue to recommend clients in need to Paul.
Accountants - Glasgow
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