About the Recovery Loan Scheme (RLS)

There have been several iterations of the RLS over the last few years, with many businesses accessing RLS funds to aid them through the coronavirus pandemic. Businesses that received assistance through any of the schemes that were in place from 6 April 2021 to 30 June 2022, including the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme, can apply to the newest iteration of the Recovery Loan Scheme. If your business accessed funds throughout the Covid-19 pandemic under the RLS, the amount you borrowed won’t affect how much you can access through the latest RLS.

However, if you accessed a Bounce Back Loan, you may find that the amount you borrowed will impact how much you’re entitled to borrow under the new RLS.

Funds distributed under the RLS can be used for any genuine business need, with the government guaranteeing 70% of the approved finance to the lender. How much you may be able to access and your borrowing terms will vary depending on your lender.

The RLS is a flexible and accessible scheme that aims to better the financial borrowing terms available to businesses. If a lender is able to provide you with more favourable credit terms outside of the RLS, they will do this instead. The RLS is designed to help businesses get more desirable terms, but is somewhat of a last resort for accredited lenders.

Currently the RLS is open until 2024. This is subject to review by the government.

Key features and benefits

• Access to up to £2 million per business group outside of the Northern Ireland Protocol
• Access to up to £1 million per business group inside the Northern Ireland Protocol scope
• Variety of financial products offered, including overdrafts, invoice financing, asset finance, and set-term loans (lender dependant)
• Set-term loans and asset finance is available from three months to six years
• Invoice finance and overdrafts are available from three months to three years
• Annual interest rate cannot exceed 14.99%
• Between £25,001 and £2 million may be borrowed across set-term loans and overdrafts for businesses outside the NI Protocol, and up to £1 million for businesses inside the NI Protocol scope
• Asset and invoice finance amounts range from £1,000 to £2 million for businesses outside the NI Protocol, and up to £1 million for businesses inside the NI protocol scope
• Applications can be processed in 24 hours through Aurora Capital

Business Recovery Loan Eligibility

Nearly all business sectors can apply for the RLS, except:

• Banks and building societies
• Insurers / reinsurers
• Primary and secondary schools that are state funded
• Public sector bodies

There is a set criteria that businesses looking to access the RLS must adhere to, including:

• UK-based: All businesses under the RLS must be trading in the UK, with 50% of their income coming from trading activities
• Turnover: Businesses can have a maximum of £45 million turnover on a group basis
• Viability: Businesses must have a viable business proposition, with lenders having discretion to disregard short and medium-term performance as a result of the coronavirus pandemic
• Covid-19 impact test: Previous versions of the RLS required businesses to confirm if they had been negatively affected by the Covid-19 pandemic, but this is no longer required under the latest RLS (charities and further education colleges with 50% or less turnover from trading must still confirm if Covid-19 has impacted them)
• Business difficulty: Businesses must not be in difficulty or going through insolvency proceedings

Like any form of borrowing or finance, businesses are 100% liable for debt repayment. Although the scheme is backed by the government and administered by the British Business Bank, lenders are responsible for decision making and therefore acceptance to the scheme is at their discretion. Some lenders may require a personal guarantee and standard credit/fraud checks will be carried out in-line with each lender’s standard protocol. Your private principal residence cannot be used as a security guarantee against the loan.

In addition, the lender may carry out their usual debt recovery process to ensure the money is repaid. This means as a business, you will be liable to standard debt recovery and management processes.

On the whole, the RLS is designed to ensure better borrowing terms for the borrower, but loan terms and amounts are at the discretion of the lender.

Compare Recovery Loan options today

There are a number of lenders operating under the RLS scheme who can provide varying types and amounts of finance to businesses that need it to grow. At Aurora Capital, we work with a range of lenders, ensuring you’re matched with the right one for you. Compare recovery loans and find a suitable borrower today.

Am I eligible for the Recovery Loan Scheme?

If your business is UK-based, viable, not in difficulty, and has a turnover of less than £45 million, you could be eligible for the RLS scheme. Banks, public sector bodies, insurers, and state funded primary and secondary schools are not eligible.

How much can I get with the Recovery Loan Scheme?

The maximum amount you can borrow under the RLS depends on whether your business is within the Northern Ireland Protocol scope and the type of finance you are looking to get.

• Asset and invoice finance: £1,000 – £2 million for non-NI Protocol borrowers, £1,000 – £1 million for NI Protocol borrowers
• Set-term loans and overdrafts: £25,001 – £2 million for non-NI Protocol borrowers, £25,001 – £1 million for NI Protocol borrowers

After applying for the Recovery Loan Scheme with Aurora Capital, we’ll be able to advise you how much you are eligible to loan. The RLS gives the lender a government-backed guarantee, making you liable for the total loaned amount.

How to apply for the business Recovery Loan?

You can apply for a business recovery loan via Aurora Capital today.

What types of recovery scheme loans are available?

There are a number of different types of recovery scheme loans available depending on your needs, including a term loan, invoice finance, asset finance, and overdrafts.

What are the Recovery Loan Scheme interest rates?

The interest rate for RLS finance is capped at no more than 14.99% annually.

Does the Recovery Loan scheme include a credit check?

Lenders may carry out relevant credit and security checks. Businesses in financial difficulty are exempt from the RLS scheme.

Can I apply for the RLS If I have been refused a loan in the past?

As long as you meet the eligibility criteria and your business is not in difficulty and is viable, you can apply for the RLS. It doesn’t matter if you’ve been refused credit, even government credit, before.

Is the Recovery Loan the same as a bounce back loan?

The RLS is not the same as a bounce back loan. Both have different eligibility criteria and terms. Having a bounce back loan can limit how much you can borrow through the RLS.

Can I apply for the Recovery Loan Scheme (RLS) even if I already have a CBILS or Bounce Back loan?

Yes, you can, but the amount you’re entitled to borrow may be limited if you have a CBILS or bounce back loan.

What can I do if my Recovery Loan Scheme is declined?

If you are rejected for an RLS by a lender, you can apply again through other accredited lenders or look at an alternative unsecured business loan lender.

What is the Recovery Loan Scheme end date?

The current iteration of the RLS will close in 2024.

Will I need a personal guarantee to be able to apply?

Some lenders may require a personal guarantee as part of the application. This is at the discretion of the lender.

What can the funds be used for?

RLS funds can be used for most business purposes, including managing cash flow, investing, and refinancing existing schemes like CBILS.

What is the government guarantee?

The government guarantee provides lenders with a 70% guarantee against the outstanding debt balance.

When do borrowers have to pay the money back?

Repayment terms vary from lender to lender and depending on the product. Term loans and asset finance can be taken out across a six-year period, whilst overdrafts and invoice finance are available across a three-year period.

Can I take more than one facility through the scheme?

Yes, you can access different credit facilities as long as you do not exceed the maximum amount you’re eligible to borrow overall.