COVID-19: Recovery Loan Scheme - Updated: 8 April 2021

  • Coronavirus: Recovery Loan Scheme

    HM Treasury has announced the opening for applications to the Recovery Loan Scheme. This is part of government-guaranteed finance throughout 2021, primarily in response to COVIV-19.


    From 6 April 2021 companies can apply for loans to support their businesses. In preparation for non-essential retail and outdoor hospitality reopening next week can access loans. In particular, HM Treasury identified coffee shops, restaurants, hairdressers and gyms.


    The terms of the Recovery Loan Scheme are:


    • Term loans and overdrafts available from £25,001 to £10 million.
    • Invoice finance and asset finance available from £1,000 to £10 million.
    • The government will guarantee 80% of the finance.
    • No personal guarantees need for amounts up to £250,000 and no principal private residences to be accepted as security.
    • Term loans and asset finance available for terms up to six years.
    • Overdrafts and invoice finance available for terms up to three years.
    • Interest rates have been capped at 14.99% and are expected to be much lower than that in the vast majority of cases, says HM Treasury.
    • Qualifying criteria are that the recipient should be a UK trader with a viable business (if not for the pandemic), that has suffered an impact due to COVID-19. The business should not be in a collective insolvency procedure.
    • Banks, building societies, insurers, reinsurers, public sector bodies and state-funded primary and secondary schools are not eligible.


    The scheme, which was announced at Budget 2021 and runs until 31 December 2021. It will be administered by the British Business Bank, with loans available through a network of accredited commercial lenders with 26 already accredited.


    The Recovery Loan Scheme can be used as an additional loan on top of support received from the emergency schemes


    • The Bounce Back Loan Scheme
    • Coronavirus Business Interruption Loan Scheme which was put into place last year.
    • The new Restart Grants scheme launched last week, providing funding of up to £18,000 to eligible businesses


    Useful guides on this topic


    COVID-19: Loan funding

    COVID-19: different types of loan funding. All loan funding is repayable.


    COVID-19: Government support tracker

    This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.


    External links


    The Recovery Loan Scheme

    British Business Bank Recovery Loan Scheme: current accredited lenders


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