TT346: Recovery Loan Scheme (‘RLS’) launched – 6 April 2021

April 19, 2021

The scheme was originally announced in the March 2021 Budget, and in which the Chancellor of the exchequer, Rishi Sunak, pledged to announce the UK Government’s latest support for businesses affected by COVID-19.

In unveiling this new initiative, he stated that “the Government has stopped at nothing to protect jobs and livelihoods throughout the pandemic and as the situation had evolved, we have ensured that our support continues to meet business needs. As we safely reopen parts of our economy, our new RLS will ensure that business continue to have access to the finance they need as we move out of this crisis”.

The RLS runs until 31 December 2021 and will be administered by the British Business Bank. Loans will be available through a diverse network of accredited commercial lenders. Loans will include 80% Government guarantee and interest rate cap.

A lender can provide up to £10 million as one of the following facilities:

  • Term Loan
  • Overdraft
  • Invoice finance
  • Asset finance

If the borrowing is £250,000 or less the lender won’t take any form of personal guarantee. Above £250,000 the lender has discretion but the maximum that can be covered by personal guarantee is capped at a maximum of 20% of the outstanding balance of the RLS facility after the proceeds of business assets have been applied. No personal guarantees can be held over Principal Private Residences.

With non-essential retail and outdoor hospitality reopening on 12 April 2021 the RLS is seen as appropriate additional support available to businesses to protect jobs.

The RLS can be used as an additional loan on top of support received from other emergency schemes such as the Bounce Back Loan Scheme and Coronavirus Business Interruption Loan Scheme, which were put into place last year.


The RLS will provide additional support to those businesses that need it and supplements the £75 billion of loans to date backed by the UK government as part of the unprecedented £350 billion wider support package. The RLS will ensure that businesses continue to benefit from Government-guaranteed finance throughout 2021.


The RLS represents a welcome and helpful opportunity for businesses to access vital Government backed funding to assist with the recovery from the effects of the Coronavirus pandemic, and if you have any questions regarding the above, please do not hesitate to get in touch with your Barnes Roffe contact partner.

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