The Recovery Loan Scheme closed to new applications on 30 June 2024. Interest and fees were capped at 14.99% annually, set by the lender based on risk. Loans ranged from £1,000 to £2 million with repayment terms of up to 6 years. RLS has now been replaced by the Growth Guarantee Scheme.
What Was the Recovery Loan Scheme?
Launched in April 2021, the RLS was a UK government-backed loan programme to support trading businesses impacted by COVID-19. It ran in phases until 30 June 2024.
RLS loans could be used for cash flow, growth, or investment. Though the government guaranteed 70% of each loan to the lender, the borrower remained 100% liable.
Today, similar support continues under the Growth Guarantee Scheme.
Loan Types and Limits
Loan limits:
- £25,001 to £2 million for term loans and overdrafts
- £1,000 to £2 million for invoice and asset finance
- Up to £1 million under the Northern Ireland Protocol
Loan terms ran up to 6 years for term loans and asset finance, and up to 3 years for overdrafts and invoice finance.
Interest Rates
Interest and fees were charged from day one. Each lender determined the rate based on your business’s risk profile. However, the British Business Bank capped the total annual cost (including interest and fees) at 14.99%.
This cap applied across all RLS lending until the scheme closed. While average rates varied, they typically fell between 6–12% depending on the lender, loan size, term length, and business creditworthiness.
There were no fixed rate bands like 6.16% for three years or 7.06% over six years, as previously reported. Instead, rates were individually risk-based, up to the capped limit.
The Recovery Loan Scheme in Action
There were no early repayment penalties, and personal guarantees were not required for loans up to £250,000.
As of 31 March 2024, data from the British Business Bank showed:
- 3.19% of RLS loans were in arrears
- 2.09% were in default
Despite economic pressures, most loans performed well, showing strong demand for government-backed funding solutions
Advantages of the Recovery Loan Scheme
The Recovery Loan Scheme filled a gap after the end of CBILS and BBLS. Key benefits included:
- Borrow up to £2 million, even if you’d used CBILS or BBLS
- No early repayment fees
- No personal guarantee required for loans up to £250k
- Funds could be used for growth, investment, or cash flow
- Quick lender decisions and flexible repayment terms
It was a practical choice for businesses that needed liquidity during the post-COVID recovery.
