What You Need To Know About The Recovery Loan Scheme

What You Need To Know About The Recovery Loan Scheme

There’s a new loan scheme to help finance UK business as they grow and recover from the disruption of the pandemic.  Let me share what you need to know About The Recovery Loan Scheme


What Do You Need To Know About The Recovery Loan Scheme?



Launched in early April the Recovery Loan Scheme (RLS) will replace the existing finance support schemes – the Coronavirus Business Interruption Loan Scheme (CBILS), and Bounce Back Loan Scheme (BBL).


Coronavirus Business Interruption Loan Scheme 

The Coronavirus Business Interruption Loan Scheme (CBILS) was for medium to large businesses. You could borrow from £25,000 up to many millions of pounds.  The government backed around 80% of the loan.  This reduced the risk on the banks meant funding was a lot easier to get than in normal times.


Bounce Back Loan Scheme

The more common scheme, was the Bounce Back Loan Scheme (BBL). This scheme was for smaller businesses. And they lent from £2,000 pounds up to £50,000.


It was the best scheme that they’ve ever had in UK history for small business owners. The reason for that was because it was very fast to get funded. 


A lot of my Business Accelerator students, went into their internet banking in the evening, and had the money the next morning .


The government backed 100% of these loan, this reduced the risk for the bank. The loans were over 10 years at 2.5% interest.


Both the CBILS loans and Bounce Back Loans ended in March 2021.


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Recovery Loan Scheme 


This new scheme, the money is going to be a little harder to get, but it’s not going to be impossible.


In fact, it’s going to be way easier than any business loan that you may have ever had in your business history.


What I want you to understand is, prior to applying for this scheme, you need to get stuff organised.


With the bounce back loans, you didn’t need to do that you just applied and received the money.


They just lent the money fast out to people, because those were to get people to survive. With the Recovery Loan Scheme less people will be getting them.


These loans are to help people recover, this time they will be looking more at if they lend will the business have a good chance of survival.   Its vital that before you apply for the scheme you are more organised and have stuff in place.



What Should I Prepare Before Applying A Recovery Loan Scheme? 


Get Your Stuff Organised

Go to Companies House and check you’ve got your annual return complete.


It’s a simple thing that you do every year.


When I applied for a BBL last year, I didn’t have my annual return submitted it was a few days late.  The lender I used would not lend until I had that filed and it was showing on Companies House.


Once the annual return was sorted my bounce back loan came very  quickly.   So its essential you  have this organised prior to applying as it will slow you down.


Get Your Accounts Up-to-date

If you’ve got historic accounts you need to get them organised and submitted. Even if you’ve lost money, it doesn’t matter but you need all your paperwork up to date. Go to Companies House and submit all the required paperwork.  Check with your accountant when your next accounts are due to be submitted.


Get A Business Plan 

This is not required but this may be useful to prove you can still be viable the following years.


Forecast what you expect to do the rest of this year, next year, and the year after. The more information they can see, the easier it is for them to understand that your business is viable going forward.


How much money can you borrow with the Recovery Loans Scheme (RLS)?


The Recover Loan Scheme lends  from £25,000 up to £10,000,000. The kind of money to actually get you back on track in business. You can borrow it at a very cheap rate is 6%, which is the headline rate.


Pros with the RLS:

  • Fast money
  • Business doesn’t need to be profitable

Cons with the RLS:

  • You have to pay it back
  • They’re going to be a little bit more picky who to approve this time around


You need to be a little bit more organised, get your accounts in place,  show that your business is going to be good going forward.


In the business plan I would show them you have a plan to get and keep customers.   They need to see if they lend you a huge sum of money you are going to stay open to pay it back.



There is a LOT of information coming out about the Recovery Loan Scheme on a daily basis.  A great place to stay up to date with whats happening is on my Youtube channel which you can subscribe to here.


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