How the government’s Recovery Loan Scheme works – and how to apply



The coronavirus in the UK appears now to be on the back foot, with cases and hospitalisations dropping across the country.

It has been a hard time for businesses over the past 18 months, with companies facing challenges they never though they would encounter.

But with the pandemic subsiding, firms are now looking to the future.

Here, Nick Marshall, Director at Beatons Group, delves into what financial support is available to business in the government’s Recovery Loan Scheme.

How is this scheme different?

The government scheme was introduced to help businesses access to loans as they look to rebuild post-pandemic.

This scheme is different to the previous bounce back scheme – the loans are much bigger this time, but so are the interest rates.

Businesses must jump through a few more hoops to acquire a recovery loan, with extensive checks required to a business’ financial viability and demands for personal guarantees.

Despite this, the loan scheme may be a good source of funding for larger businesses looking to reopen with a bang.

Who can apply for a loan?

The loan scheme is open to any business trading in the UK; however, they must be able to show they would have been viable had it not been for the pandemic.

Not only that, but businesses must also be able to show they were adversely affected by the pandemic.

The only companies who cannot apply are banks, insurers, building societies, public sector bodies and state-funded primary schools.

If your business received funds through the bounce back loan scheme, don’t worry, you are still eligible to access money through the Recovery Loan Scheme.

How much can I apply for?

This time, the loans available are larger.

Each business can apply for loans and overdrafts from £25,001 to £10million.

They can also apply for invoice finance and asset finance of between £1,000 and £10million per company.

It is worth noting that a borrower’s principal residence cannot be used as security and that personal guarantees will not be taken on facilities up to £250,000.

This loan scheme has not been as popular as the last, with reports that the more rigorous checks and higher interest charges may be putting some businesses off.

Having said this, if your business is looking to grow or rehire staff, this may be a good way to get the necessary funding.

If you would like help with applying for financial support, please get in touch via or call 01473 659777.