Recovery Loan Scheme is Ending Soon

Dave Jangid | Debitam By Dave Jangid |
Recovery Loan Scheme is Ending

The Recovery Loan Scheme has helped many businesses over the pandemic period in an effort to help recover the economy. Sadly, this is now ending on 30 June 2022. Or is it?!

What is the Recovery Loan Scheme?

A quick recap of the long and intricate history of The Recovery Loan Scheme (RLS)

  • It was set up by the government on 6 April 2021 to help businesses across the UK during the Covid pandemic and the transition period into our new “normal”.
  • The loan can be borrowed for up to 6 years and capped at a 15% interest rate, and can be used in several ways such as
    - buying new equipment,
    - growing your business,
    - marketing,
    - and managing your cash flow.

With the end of the scheme fast approaching, you might be thinking there is no point in applying, however, the businesses can still claim up to £2 million before the 30th of June. Perfect for putting that bit extra back into your business.

Am I still eligible for Recovery Loan Scheme?

BEFORE THE 1ST OF JANUARY 2022: Any business within the UK that had been affected by Covid was eligible to receive the loan. There was no turnover limit to apply but credit checks were essential even though business owners did not need to show a guarantee.

The only exceptions to this were banks, building societies, insurers, reinsurers (insurance brokers are still eligible), state-funded schools, and public sector bodies.

How does the Recovery Loan Scheme Work?

The Recovery Loan Scheme can be taken out in the form of loans, overdrafts, asset financing, and Invoice financing. The minimum a company can borrow on this scheme is £1,000 for asset or invoice financing, whereas, for loans and overdrafts it’s £25,001. Before the 1st of January businesses were receiving guarantee coverage of 80% from the government.

How to Apply for Recovery Loan Scheme?

There is a wide range of Banks and Building Societies offering the Recovery Loan Scheme, some familiar banks included are:

There are many more, see the full list at

Changes to the Scheme from the 1st of January 2022

  • From the 1st of January, the recovery loan scheme is only open to small and medium-sized businesses, meaning that businesses with over 250 employees will no longer be eligible for the scheme.
  • The applications for the recovery loan scheme were lower than Coronavirus Loan Schemes and Bounce Back Loan Schemes, therefore the Recovery Loan Scheme has been extended until the 30th of June.
  • Finally, the guaranteed coverage the government will provide to lenders is reduced to 70% down from 80%.

What are the Benefits of the Recovery Loan Scheme?

The Recovery Loan Scheme has some great benefits for businesses to recover from the coronavirus, these include:

  • Interest rates are capped at 14.99%
  • No minimum turnover to apply.
  • Different ways to borrow the money, (loans, overdrafts, invoices, or asset financing.)
  • The business owner doesn’t have to show a guarantee. (But still subject to a credit check)


The Recovery Loan Scheme is overall a great tool to use if you and your business were affected by the Covid pandemic, it’s lower risk than other loans and can be taken out in a way that suits you best. But keep in mind this is still a loan and will need to be paid back within the 6 years, make sure your business is in the position to pay this back to avoid affecting your business negatively in the future. If this sounds like the right thing for you get apply before the 30th of June so you don’t miss out!

Dave Jangid | Debitam By Dave Jangid |
Note: Please note that the content of the above blog and the aforementioned information are solely for the purpose of awareness and are informative in nature. The content is designed with intent to ease the understanding while preserving the essence and importance of the compliance rules and shall not be considered as an ultimate replication of the rules. Debitam does not own any responsibility whatsoever for any unpleasant event that may arise due to the misinterpretation of a specific part or whole of the information.

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