Recovery Loan Scheme – RLS | 2021 Updates

Written by: Liez Comendador
Written by: Liez Comendador
Recovery Loan Scheme

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British Business Bank introduced the Recovery Loan Scheme on April 6th, 2021 (valid till December 31st, 2021), as a new debt finance scheme to replace the existing ones, including Coronavirus Large Business Interruption Loan Scheme – CLBILS, Coronavirus Business Interruption Loan Scheme – CBILS, and Bounce Bank Loan Scheme – BBLS. These schemes were introduced by the UK government in order to keep the businesses floating that were affected by the COVID-19. Apart from COVID-19 purposes, the Recovery Loan scheme can be opted by business persons for other reasons also, mainly including access to finance to save their business from additional losses.

The Recovery Loan Scheme will be valid until December 31, 2021.”

A maximum of £10 million can be provided to the business. A minimum of £1000 can be offered to assets and invoice finances and £25,000 for term loans and overdrafts. The government provides complete security to the lenders against the given amount, and the business persons are always in debt. If your loan is £250,000 or less than it, then a personal guarantee might not be demanded. But if the amount taken as a loan exceeds £250,000, the lender might ask for a personal guarantee.

The Loan Scheme can offer £1000 to £10 million worth of lean to a business.”

Recovery loan schemes works by finding a lender on a British Business Bank website and finalizing the right deal with the lender. The lender may demand a personal guarantee, management accounts, business plan, historical accounts, and details of assets to prove that a borrower will be in a state to repay the amount! The working strategy of this scheme resonates between lenders, which the British Business Bank accredits, and probably you if your business is being affected by the COVID-19. You can easily approach the lenders through the British Business Bank website, where many lenders are officially registered. The opportunities provided by any lender are:

  • Term Loan – lasts for six years
  • Overdraft – lasts for three years
  • Invoice Finance – lasts for three years
  • Asset Finance – lasts for six years
While entertaining your business with RLS, you can also get benefitted from the previous one. How is RLS different from existing finance schemes? The recovery Loan Scheme is different from others on the basis of no turnover limit, but the maximum loan is capped at £10 million. In addition, you will not be charged any sort of interest or fee for the first whole year by the British Business Bank. According to the RLS, businesses are required to the costs of interests and any other fees connected with the scheme. The suggested interest amount cannot exceed more than 14.99%.

RLS has no turnover limit.”

You are eligible to avail RLS in the following circumstances:

  • The Recovery Loan Scheme applies to businesses that are currently running in the UK.
  • You need to prove that your business is affected by the pandemic.
  • Banks, insurers, public sector, and state-funded primary and secondary schools cannot apply for Recovery Loan Scheme.

Despite all the information mentioned above, the lenders will be facing some difficulties to recover unpaid recovery loans as quoted in the Mail on Sunday recently:

“HSBC, NatWest, Barclays, and Lloyds have begun writing to businesses warning them that repayments on emergency support loans will soon be expected. Banks have handed out more than £75bn to 1.6m firms under several schemes set up by Rishi Sunak, the Chancellor, and are expected to spend millions on recovery. However, one senior banker warned that lenders could go in hard to recover debts after a recent court case found banks do not have a duty of care to borrowers who fail to repay.”

If you have concerns about RLS, Legend Financial has a team of experts whom you can talk with on those matters. Send us a message or book a schedule with us here!



Bounce Back Loan Scheme (BBLS). (n.d.). Retrieved from British Business Bank:

Coronavirus (COVID-19): Recovery Loan Scheme. (2021, March 3). Retrieved from Gov.UK:

Coronavirus Large Business Interruption Loan Scheme (CLBILS). (n.d.). Retrieved from British Business Bank:

Recovery Loan Scheme for businesses. (n.d.). Retrieved from British Business Bank:

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