The Recovery Loan Scheme has been extended - are you eligible?

By Horsfield & Smith Chartered Accountants

10 Nov 2021

With most of the Government’s Covid financial support schemes now closed, the Recovery Loan Scheme (RLS) has been a last route to funding for many Covid-impacted businesses.

The RLS was scheduled to end on 31 December, putting a very final full stop on government-backed financial assistance for the business community. But in the Autumn Budget & Spending Review 2021, the Chancellor, Rishi Sunak, announced an extension of six months to the scheme, making it possible to apply for a recovery loan until 30 June 2022.

So, is your business eligible for this funding? And, how much could you borrow to fund the next stage of your recovery in 2022?

Who is eligible for the Recovery Loan Scheme?

The Recovery Loan Scheme (RLS) is aimed primarily at businesses which are viable in the market, but that are struggling to recover and grow due to Covid-19. Funding of up to £10 million is available to eligible businesses that can meet the conditions for making an RLS claim.

Your business must:

have been negatively impacted by the Covid-19 pandemic; be trading in the UK (more than 50% of turnover); be a viable business proposition, going forward.

A chance to boost your working capital

If you meet the RLS criteria, this is an excellent opportunity to borrow money on very attractive terms and to bring additional working capital back into the business. Facilities are available as asset finance, invoice finance, overdrafts or term loans.

Within the £10 million, the maximum for an individual business is: double 2019 (or latest year available) wage bill; 25% of 2019 turnover; 12 months (18 months for SMEs) forecast liquidity requirements. The lender can choose which of the three sub-maximums to apply. Existing CBILS (but not BBL) advances come off the sub-maximum. The minimum loan and maximum term depends on the type of facility taken out: asset finance £1,000 / max 6 years; invoice finance £1,000 / max 3 years; overdraft £25,001 / max 3 years; term Loan £25,001 / max 6 years. The RLS is offered by a range of different approved lenders and each lender will determine the specific interest rates and applicable fees (taking into account the benefit of the government guarantee). The Government currently guarantees 80% of the loan. Personal guarantees (PGs) are not allowed for facilities below £250K. Above £250K, PGs can be required but can’t include your private residence and are capped at 20% of any shortfall after any business assets sold in event of default.

A decrease in the government-backed loan guarantee

Currently, the Government is offering a guarantee against 80% of any losses on recovery loans that are taken out via accredited lenders. This has encouraged lenders to offer loans where the decision was marginal without the guarantee, while keeping them open to a small amount of risk.

Unfortunately, an additional change to the scheme was also announced in the Autumn Budget, with the level of that government-backed guarantee dropping down from 80% to 70%. This 10% drop down to a 70% guarantee will take place for loans advanced from 1 January 2022.

The decrease in the guarantee could be problematic. It’s not yet known if currently accredited lenders will need to re-apply for re-accreditation, and this process could have an impact on prices and the availability of RLS lenders.

At present, it’s uncertain what the full impact of the decrease will mean for recovery loans. But, with an abundance of caution, we would strongly advise applying for a recovery loan before 31 December 2021, to alleviate any issues.

Talk to us about applying for a recovery loan

Lenders will want to see some form of business plan or projection before approving any facilities. We’re ideally placed to help you prepare financial projections and to provide the accounts, cash flow forecasts and background information that a lender will want to see.

Come and talk to us about the Recovery Loan Scheme and your financing requirements in general. We’ll support your applications and will help you to manage your funding needs.

Get in touch to discuss the Recovery Loan Scheme on 0161 761 5231 or email [email protected].

Latest news

1

REVEALED: Sub36 Awards winners 2026 S36 Winners

REVEALED: Sub36 Awards winners 2026

16 Oct 2026

2

Three in a row for Lancaster accountants at national awards The Team At Ics Celebrating Their Win

Three in a row for Lancaster accountants at national awards

15 Oct 2026

3

Victorian Plumbing records 11 per cent revenue increase Victorian Plumbing staff

Victorian Plumbing records 11 per cent revenue increase

15 Oct 2026

4

Preparation matters for MTD changes Bilal Piperdy

Preparation matters for MTD changes

15 Oct 2026

5

Training for scheme to boost number of women in technology Aerial photo of Lancaster University Campus

Training for scheme to boost number of women in technology

15 Oct 2026

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

The Landmark, School Lane, Burnley, BB11 1UF

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Help to Grow: Management Course
Help To Grow 25 Sep 2026 - 15 Dec 2026

Help to Grow: Management Course

University of Lancashire, Preston, PR1 2HE

09:30 - 12:00

Commercial Planning Application workshop
Commercial Planning Workshop 20 Oct 2026

Commercial Planning Application workshop

Online, Accrington , BB5 0PF

12:00 - 13:00

They’ve Already Decided About You – Sales Geek Sales Club: how buyers judge you before you speak – and what to do about it
Lancaster And Morecambe Logo 1 21 Oct 2026

They’ve Already Decided About You – Sales Geek Sales Club: how buyers judge you before you speak – and what to do about it

Lancaster & Morecambe College, Lancaster, LA1 2TZ

08:00 - 10:00

Mock Tribunal - step inside an employment tribunal… without the risk
LBV Website Events GraphicMock Tribunal 21 Oct 2026

Mock Tribunal - step inside an employment tribunal… without the risk

Online, Preston, PR1 3JD

09:30 - 12:30

Preston Freelancer Meet-Up: October
Freelance Meet Up 22 Oct 2026

Preston Freelancer Meet-Up: October

Society1, 9-10 Cross Street, Preston, PR1 3LT

10:00 - 12:00

North West Business Expo
LBV Website Events GraphicBusiness Expo 1 23 Oct 2026

North West Business Expo

Toughsheet Stadium , Bolton, BL6 6JW

09:00 - 15:00

Girlie Night Out
Lancaster And Morecambe Logo 1 23 Oct 2026

Girlie Night Out

Lancaster Brewery, Lancaster, LA1 3LA

19:00 - 23:00

Lancashire Finance Leaders Forum: The Autumn Budget in Focus
ian-UmTFcwHLPC0-unsplash.jpg.jpg 29 Oct 2026

Lancashire Finance Leaders Forum: The Autumn Budget in Focus

Farington Lodge Hotel, Stanifield Lane, PR25 4QR

08:00 - 10:00

The PM+M Autumn Budget seminar - East Lancashire
Autumn Budget 2026 LBV 29 Oct 2026

The PM+M Autumn Budget seminar - East Lancashire

Blackburn Rovers Football Club (Premier Suite), Blackburn, BB2 4JF

08:00 - 10:30

Blackburn Budget Breakfast 2026
LBV Website Events GraphicBudget Breakfast 30 Oct 2026

Blackburn Budget Breakfast 2026

Premier Suite, Blackburn Rovers FC, Blackburn, BB2 4JF

07:30 - 10:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV130 Online GraphicWebsite
Subscribe now

Weekly news bulletin