Extension to the Recovery Loan Scheme

24 - 08 - 2022

A new version of the Government's expiring Recovery Loan Scheme (RLS) has been announced as part of plan for economic recovery post COVID-19. Phase 1 of the Recovery Loan Scheme ceased on 30 June 2022.

The new business loan scheme, which is regarded as an extension of the original recovery loan scheme or Phase 2, was instigated as of 01 August 2022 and is expected to run for 2 years until 30 June 2024.


Banks offering the Loan facility


The scheme will be administered by The British Bank on behalf of the Secretary of State for BEIS.


Currently the following banks and lenders have announced they are participating in the scheme:


·         Atom Bank;

·         Bank of Scotland,

·         BCRS Business Loans;

·         Coventry & Warwickshire Reinvestment Trust (CWRT);

·         DSL Business Finance Ltd;

·         First Enterprise Loans;

·         Genesis;

·         HSBC;

·         Lloyds Bank;

·         NatWest;

·         Royal Bank of Scotland;

·         Ulster Bank.

Others are expected to announce their involvement.


Reason for the Scheme


The scheme is intended to help businesses recover and grow following the Covid-19 pandemic.


The intention is to offer funding to businesses who may be struggling to access finance from elsewhere.




The loans should be available to all businesses regardless of whether they have already used the RLS, CBILS, Bounce Back Loan or any other coronavirus finance scheme.


Business must be trading in the UK with a maximum turnover of £45 million per year.


Business cannot currently be involved in insolvency proceedings. Businesses must be able to show that they are viable and not in difficulty.

Lenders will be required to certify that they would not have been able to offer a facility to the business on their normal commercial terms, or that they would have only been able to do so at a higher interest rate.




·         Government will underwrite 70% of the loan value;

·         Business can borrow from £25,001 up to £2 million for term loans and overdrafts and £1,000 minimum for asset and invoice finance;

·         A Principal Private Residence cannot be used as security so no one should be putting their home at risk;

·         Loan can be repaid  between 3 months and a maximum of 6 years;

·         Borrowers will need to confirm in writing that any loan will not mean they have exceeded the maximum subsidy the business is allowed to receive.




·         Loan must be for a legitimate business purpose;

·         Turnover up to £45 million;

·         Trading activity must be UK based;

·         No Covid-19 impact assessment is required;

·         Lender must consider if the borrower has a viable business proposition but may disregard concerns over business performance due to Covid-19;

·         Business cannot be in difficulty;


Interest Rates


As the Government is underwriting 70% of the loan the lender has a lower risk of losing their funds. The interest rates should, therefore, be competitive and lower than other forms of finance. The actual interest rate will need to be agreed with the lender.  The annual effective rate of interest and fees cannot exceed 14.99%.


Early Repayment


Early repayment terms will depend on the terms of the loan and may include an early repayment settlement fee.


How does the Recovery Loan compare to other forms of finance?


Borrowers should consider their requirements and investigate the other forms of finance available to them. Dependent on business needs and the reasons for finance there may be other sources of finance that are more suitable.



Further Information


Further information can be found on the British Bank website at:



If you would like to discuss any of the information noted above please contact us on:


01244 625 500 or 01978 364 000


Whilst all due care and attention has been taken in the preparation of these notes no liability

can be accepted for any omission or item contained therein. 






Foremans LLP Umberlla
Foremans LLP