Compare Recovery Loans

The Recovery Loan Scheme originally aimed to help businesses build and grow as they came to terms with the effects of the pandemic. This scheme allowed businesses to continue to access support once other government loan schemes (CLBILS, CBILS, BBLS) had closed.

Since 1 August 2022, however, the need to prove the impact of Covid-19 has been removed as part of the scheme’s eligibility criteria.

Recovery Loans come with a 70% government guarantee, which means the government compensates the lender with this percentage of the loan if the borrower was not able to repay it. This guarantee aims to encourage lenders to approve loans to businesses, as it reduces the risk of the lender not getting its money back.

The Recovery Loan Scheme is intended to support businesses and help them grow, but there are no restrictions on what exactly the money should be used for.

Businesses can use a Recovery Loan to improve cash flow, to help with payroll costs, to invest in equipment or to fund any other projects that are useful to their operations.

The Recovery Loan Scheme launched on 6 April 2021 and has since been extended multiple times, most recently to 30 June 2024.

From 1 January 2022, you are only eligible for the Recovery Loan Scheme if your business turnover did not exceed £45 million a year.

Some businesses, including banks, building societies, insurers and public sector bodies are not eligible for a Recovery Loan regardless of turnover.

Since 1 August 2022, when applying for the Recovery Loan Scheme, businesses no longer need to show lenders that they have been adversely affected by the coronavirus pandemic and that, had there not been the pandemic and the subsequent restrictions, their business would have been viable.

The Recovery Loan Scheme offered term loans and overdrafts from £25,001 to £2 million per business group. For businesses operating within the Northern Ireland Protocol, the cap per business group is reduced to £1 million.

Invoice finance and asset finance from £1,000 are also available under the scheme.

After taking out a Recovery Loan, repayments start immediately. However, it is possible to choose up to six years to repay term loans and asset finance under the Recovery Loan Scheme, and up to three years to repay overdrafts and invoice finance.

Under the new rules introduced on 1 August 2022, lenders can take personal guarantees ‘in line with their normal commercial lending practices’.

However, Principal Private Residences remain off limits, and cannot be taken as a security when applying for a Recovery Loan.

As long as businesses meet the scheme’s criteria, they can apply for a Recovery Loan. Businesses that accessed finance from a previous government guaranteed loan scheme, such as the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS), or the Coronavirus Large Business Interruption Loan Scheme (CLBILS), are still eligible for a Recovery Loan.

Yes, lenders will conduct credit checks and fraud checks on every business that applies for a Recovery Loan. The exact checks and the requirements needed to get a loan vary between lenders.

Businesses with bad credit can apply for a Recovery Loan, although there is no guarantee that they will be accepted. Lenders review each individual application and conduct their own checks to decide if a business meets their eligibility criteria for a loan.