Recovery Loan Scheme

It’s no secret that the Coronavirus has taken its toll on small and even big businesses. However, it doesn’t have to be the end of your business. The aim of the recovery loan is to boost your financial resources.

With Clear Commercial Finance, you can access the new scheme designed to support businesses, investment, and trading activity overall. Hence, you can afford a revival industrial strategy. So, check out this article if you want to learn all about recovery loan schemes, their key features, and whether they’re suitable for you or not.

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What Is a Recovery Loan Scheme?

The recovery loan scheme (RLS) aims to help businesses and support UK businesses by lending them cash. Thus, they help them recover and grow, following the Covid-19 pandemic because many businesses were affected by it. You can benefit from the Recovery Loan Scheme, regardless of the size of your business.

To elaborate, the scheme can offer an 80% government guarantee to the lender. Still, the government-backed guarantee doesn’t mean you aren’t liable as a borrower for loan repayments and interest payments. Consequently, you have to afford to take out additional debt and pay back the amount you’re borrowing.

Furthermore, the finance provided by the RLS is used for business purposes, including managing cashflow, growth, expansion, and investment. The recovery scheme launched on 6 April 2021 is valid till 31 December 2021, subject to review.

And many businesses are able to access it, including those who have already borrowed under a previous scheme, such as the Coronavirus Large Business Interruption Loan Scheme (CLBILC), Coronavirus Business Interruption Loan Scheme (CBILS), and Bounce Back Loan Scheme (BBLS) facility.

Nevertheless, it’s worth noting that you may be given less cash under RLS if you’ve already taken out another scheme.

Moreover, if you’re unaware of who is responsible for the Recovery Loan Scheme, it’s managed by the British Business Bank. So, you’ll find many helpful resources about the existing scheme features and managing cashflow on their website.

Furthermore, the British Business Bank plc is owned by the HM government. And it isn’t authorised or regulated by the PRA (Prudential Regulation Authority) or FCA (Farm Credit Association). In addition, it’s blacked by the Secretary of State for Business, Energy, & Industrial Strategy.

As for the new scheme, you might wonder what type of finance you can get under the Recovery Loan Schemes. And they’re:

  • Overdraft
  • Term loan
  • Invoice finance
  • Asset finance

Tip: Speaking of invoice financing, you get to receive this type of funding immediately. The money amount is decided according to your invoices. And you only have to get a small processing fee paid, depending on the annual turnover of your business. Last but not least, there’s the question of business turnover. For the Recovery Loan Scheme, there’s no fixed turnover limit or turnover restriction for businesses accessing the scheme.

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CLEAR COMMERCIAL FINANCE are proud members of the National Association of Commercial Finance Brokers

How Does a Recovery Loan Scheme (RLS) Work?

The way a Recover Loan Scheme works is that it’s available through a network of lenders accredited by the British Business Bank. Still, how do you find these lenders?

At Clear Commercial Finance, we can give you access to the Recovery Loan Scheme via the lenders we partner with. So, be sure to call Clean Commercial Finance to get a quote and apply for a business loan.

If you do so, our UK-based team will take your application and review it personally. Then, they’ll match you with a lender.

Afterwards, the lender will evaluate whether you have a viable business proposition. However, they won’t count in any concerns regarding how well it’ll do over the short-to-medium term because of the uncertainty of the pandemic. They also carry out their credit and fraud checks.

Finally, they estimate whether you can afford the repayments or not. If accepted, you can receive finance for UK businesses in about 48 hours and devote your time and energy to rebuilding your business and managing cash flow.

Do Lenders Guarantee You?

There’s a government backed guarantee provided to the lender and not the borrower. So, you’re 100% liable for paying your outstanding balance. Whether lenders require personal guarantees or not depends on your loan amount.

Accordingly, lenders won’t require a personal guarantee if the loan amount is at a maximum amount of £250,000. Otherwise, if it’s over £250,000, lenders may or may not require personal guarantees.

In that case, the maximum outstanding balance guarantee is 20% after applying the proceeds of business assets. Furthermore, there are no personal guarantees over Principal Private Residences.

How Long Is the Term Length?

Your term length varies according to the type of financing you chose. To illustrate, invoice finance facilities and overdrafts range from three months to three years. As for asset finance facilities and term loans, you can pay them over a longer period. We’re talking anything from three months up to six years.

How Much Can I Borrow On a Recovery Loan Scheme?

The amount of facility provided finance is capped at a maximum amount of £10m for a business, which counts for £30m for each group. As for the minimum amount, it’s £1000 for asset and invoice finance and £25,001 for overdrafts and term loans. However, certain circumstances limit that amount as we’ll illustrate.

Such finances can undoubtedly provide the financial backing that businesses need. And your repayments will include the amount borrowed, costs of interest payments, and any recovery loan scheme fees, such as upfront fees and more.

Thankfully, with RLS loan total repayment, the maximum annual effective rate of variable interest rates, upfront fees, and other fees is 14.99%.

Who Is Eligible for the Recovery Loan Scheme?

Practically any business can be eligible to receive business finance support under the Recovery Loan Scheme if they meet the scheme’s eligibility criteria, excluding insurance brokers, building societies, insurers, and reinsurers. Therefore, the RLS aims to support you if you:

  • Have a UK-based business and are trading in the UK
  • Run a limited company or a limited liability partnership (LLP)
  • Can prove that your business would’ve been viable if it weren’t for the pandemic
  • Can confirm that it’s one of the businesses affected by Covid 19
  • Can confirm that your business isn’t in collective insolvency proceedings

Tip: When it comes to the final criterion, if your business is under the Northern Ireland Protocol, eligibility rules may differ.

Who Isn’t Eligible for the Recovery Loan Scheme?

Again, it’s essential to learn which kinds of businesses aren’t eligible under RLS banks. The scheme isn’t available to:

  • Public-sector bodies
  • Banks, building societies, insurers, and reinsurers (excluding insurance brokers)
  • State-funded primary and secondary schools

How to Prepare For a Recovery Loan Scheme Application

Perhaps the most crucial aspect to pay attention to is preparing your credit scores. That includes the business current account credit score, your personal credit score, and other directors’ credit scores (if there are any).

After all, lenders can look at your credit scores and use that to estimate your creditworthiness for a business loan or a commercial loan. Thus, it’s vital that your credit rating is decent, especially if you’ve been in business for over a year.

Otherwise, you might want to consider any credit fixes to repair the management accounts if you have a low credit score. This way, you’ll be more likely to have your application approved and get bigger loans for lower interest rates.

Why Should I Apply For a Recovery Loan?

If you’re hesitant about whether this financial backing is the right move for your business purposes, let us put your mind to ease. You’ll likely benefit from a recovery loan if you need finance for these purposes:

  • Access to cash flow
  • cashflow for equipment
  • Business expansion
  • Financial aid for a one-off cost
  • Help with payroll
  • Budget for marketing
  • Other legitimate business requirements

Tip: For all the commercial finance brokers, you can check out our specialist financing for SMEs. This service is available to our customers for both UK private and public sector bodies.

How to Apply For a Recovery Loan

1. Apply For a Business Loan

With Clear Commercial Finance online services, the application process has never been so easy for our customers. All you have to do is apply online using this form. You’ll need to fill in some required information, including business details, contact details, and other relevant details. Also, you’ll be asked if your business is currently trading.

2. Compare Rates

Minutes after you apply for the recovery loan, our team searches for available terms from the top providers in the UK. Then, you’re able to access the recovery loan scheme.

Therefore, you can compare rates and lending terms to find the most viable business reformation solution. And you can save a lot in this step. So, shop around, and consider all your options. Then, by comparing the different rates and lenders, you can find better terms for your budget. And, Voilà, you’re matched with the right lender!

3. Receive Additional Finance

At Clear Commercial Finance, we understand that time is money to our customers. So, you can receive the cashflow you’re borrowing in just 48 hours! This is how fast you can get additional finance to rebuild your businesses affected by Covid 19.

Can You Apply For the Recovery Loan Scheme if You Already Have a CBILS or a Bounce Back Loan?

Yes, the Recovery Loan Scheme is here to support businesses access finance. And that includes UK businesses who have taken a government scheme loan. Also, you wouldn’t have to refinance the existing government debt to be eligible for RLS.

However, you can’t borrow over 25% of your annual turnover, outstanding debts under the RLS, CBILS, and CLBILS schemes included. This doesn’t apply to Bounce Back Loans, though.

Are You Eligible if You’ve Been Denied Credit in the Past?

Perhaps you’ve applied for a commercial loan or any loan through a previous government coronavirus loan scheme, and your application has been rejected. Still, your RLS application can get approved.

At Clear Commercial Finance, we review your application and decide if a Recovery Loan Scheme is the right call on a case-by-case basis. We can’t guarantee approval. And you shouldn’t trust a broker that does because that defies responsible lending assessments.

Otherwise, each of the lenders that we might connect you with has their eligibility criteria for lending. So, they’ll conduct their credit and fraud checks and full credit assessment processes. Also, they’ll evaluate your application accordingly to decide if you’re eligible for this form of financial support.


Clear Commercial Finance is a commercial finance broker. We are members of the National Association of Commercial Finance Brokers and a registered office in England and Wales. You may be wondering if we’re authorised or regulated. Indeed we are authorised and regulated by the Financial Conduct Authority. And we hold permission as a credit broker.

Now that you know about us, let us give you an idea about the services we provide. At Clear Commercial Finance, our business offers bridging loans, business loans, commercial mortgages, invoice finance, property development, and buy-to-let mortgages.

As you already understand, we have access to the RLS facility via our lending partners, how can offer loans for up to six years under this scheme. If you want to contact Clear Commercial Finance and get a quote, you call us at 0333 344 3216 or email us at You may also resort to our online services by filling in our online form.

Like our customers, you’ll find that there are no better terms for your business circumstances than those we provide. After all, the key aim of the new scheme is to undertake credit and improve investment and growth by increasing the balance of the facility financial accounts.

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