The new Recovery Loan Scheme (RLS) launched on 6 April 2021 and runs to
31 December 2021, subject to review. It provides finance that can be used for any
legitimate business purpose, including managing cash flow, investment and growth.

It is designed to appeal to businesses which can afford to take on additional debt finance
for these purposes. Interest rates are capped at 14.99% and are expected to be much lower
in most cases.

The scheme offers term loans, overdrafts, asset and invoice finance. The maximum facility is £10 million per business. The minimum facility varies, starting at £1,000 for asset and invoice finance and £25,001 for term loans and overdrafts. Term loans and asset finance facilities are available for up to six
years; overdrafts and invoice for up to three.

Eligibility
• no turnover restriction applies
• open to businesses trading in the UK
• that can show their business is viable or would be, if it wasn’t for the pandemic
• that are impacted by Covid-19
• and are not in collective insolvency proceedings
• can be used on top of previous Covid-19 loan schemes, though previous borrowing may restrict amount available under the RLS
• not open to public sector bodies; state-funded primary and secondary schools; or banks, building societies, insurers and reinsurers (but not insurance brokers).

The government guarantees the lender 80% of the finance. No personal guarantees will be taken on facilities up to £250,000, and the borrower’s principal private residence cannot be taken as security when borrowing more than this. Interest and fees will have to be paid from the outset.

Credit checks and fraud checks will be carried out on all applicants. The checks
and approach may vary between lenders.

When making their assessment, lenders may overlook concerns over short to medium
term business performance caused by the pandemic. Loans are available through a network of accredited lenders and full details are here