Recovery Loan Scheme

Recovery Loan Scheme

The Recovery Loan Scheme has been extended until June 2022. Announced in the Autumn Budget 2021, the extension scheme has minor eligibility changes.

From 1 January 2022, the following changes will come into force:

  • The scheme will only be open to small and medium-sized enterprises.
  • The maximum amount of finance available will be £2 million per business.
  • The guarantee coverage that the government will provide to lenders will be reduced to 70%.

The original terms of the Recovery Loan Scheme still apply, taking into account the newly announced limitations:

  • Term loans and overdrafts are available from £25,001 to £10 million.
  • Invoice finance and asset finance are available from £1,000 to £10 million.
  • The government will guarantee 80% of the finance.
  • No personal guarantees need for amounts up to £250,000 and no principal private residences to be accepted as security.
  • Term loans and asset finance are available for terms up to six years.
  • Overdrafts and invoice finance are available for terms up to three years.
  • Interest rates have been capped at 14.99% and are expected to be much lower than that in the vast majority of cases, says HM Treasury.
  • Qualifying criteria are that the recipient should be a UK trader with a viable business (if not for the pandemic), that has suffered an impact due to COVID-19. The business should not be in a collective insolvency procedure.
  • Banks, building societies, insurers, reinsurers, public sector bodies and state-funded primary and secondary schools are not eligible.
  • The scheme, which was announced at Budget 2021 and ran until 31 December 2021. It will be administered by the British Business Bank, with loans available through a network of accredited commercial lenders with 26 already accredited. 

The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes

  • The Bounce Back Loan Scheme
  • Coronavirus Business Interruption Loan Scheme which was put into place last year.
  • The new Restart Grants scheme launched last week, providing funding of up to £18,000 to eligible businesses


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