Recovery Loan Scheme (RLS)

Flexible finance when you need it most

Recovery Loan Scheme (RLS)

The Recovery Loan Scheme (RLS) was launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the COVID-19 pandemic.

RLS aims to help businesses affected by Covid-19 and can be use for business purposes, including, managing cashflow, investment and growth.

It is designed to support businesses that can afford to take out additional finance for these purposes. Businesses who have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme.

A key aim of the Recovery Loan Scheme is to improve the terms on offer to businesses, but if a lender can offer a business the choice of a commercial loan on better terms, without requiring the guarantee provided by the RLS, they should do so.

At Autumn Budget 2021, the government announced that the Recovery Loan Scheme will be extended by six months to 30 June 2022, with changes applying to all offers made from the 1 January 2022.

If you have a query about RLS, or wish to discuss an outstanding application, please contact us at


Mercia has adopted a flexible and at times innovative approach.

Andy McKenna, Sheffield City Region Growth Hub

RLS features

Scheme features include:

– Up to £2m facility per business: The maximum amount of a facility provided under the scheme is £2m per business (maximum £6m per group). Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

– Term length: Term loans and asset finance facilities are available from three months for up to six years, with overdrafts and invoice finance available from three months for up to three years.

– Interest and fees to be paid by the borrower from the outset: Businesses are required to meet the costs of interest payments and any fees associated with the RLS facility.

– Access to multiple COVID-19 schemes: Businesses that have taken out a CBILS, CLBILS or BBLS facility are able to access the new scheme although the amount they have borrowed under a previous scheme may in certain circumstances limit the amount they may borrow under RLS.

– Personal Guarantees: Personal guarantees are not permitted for facilities of £250,000 or less. Above £250,000 the maximum amount that can be covered under the RLS 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.

– Guarantee to the Lender: The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The borrower always remains 100% liable for the debt.

Paul Taberner, MD of Debt - Mercia

Fast, professional debt solutions when you need them the most.Paul Taberner, Mercia

About NPIF Debt Finance

The NPIF Debt Finance option is designed for SMEs based in the NPIF region of the North of England with Mercia focusing on Yorkshire and the Humber.

Mercia provides term loans using NPIF Debt Finance between £100,000 and £750,000.

Lending can be to early stage or more established businesses that can demonstrate growth potential.

Loans are available up to a maximum repayment term of five years with no early repayment fees.

The fund is a key part of the government’s ‘Northern Powerhouse’ vision, which aims to help reduce the historic North-South divide and create economic prosperity in the North of England with an aim to create jobs and encourage and attract additional private sector investment.

Are you eligible?

You must be able to answer yes to all of these questions to be eligible for the scheme


  1. COVID-19 impact: The borrower must confirm that they have been impacted by COVID-19
  2. UK based: The borrower must be carrying out trading activity in the UK
  3. Viability test: The lender will consider that the borrower has a viable business proposition but may disregard any concerns over its short-to-medium term business performance due to the uncertainty and impact of COVID-19.
  4. Credit and fraud checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants as they would for commercial facilities. The checks and approach may vary between lenders
  5. Turnover limit: Businesses with a turnover not exceeding £45m per annum.

Please note: The following are not eligible under RLS:

– Banks, Building Societies, Insurers and Reinsurers (excluding Insurance Brokers)

– Public sector bodies

– State funded primary and secondary schools

What to do next

Firstly, please carefully read the eligibility points to check that your business meets the scheme criteria for both the RLS and NPIF Debt Finance.

If you have answered yes to all of the above, then please get in touch here so we can help you plan your next steps. If you want to speak to someone directly, you can reach the RLS team on 0330 223  2830.

If you are not sure and what to ask the team a question, you can do that here. Mercia has several offices in the NPIF region, although at the moment we are conducting all our meetings remotely.

We can also organise an initial telephone call or an online meeting to get things moving quickly – you can request a call or virtual meeting here.

We aim to respond to your enquiry within 24 hours putting you directly in touch with a member of the investment team who will handle your enquiry promptly.


Apply now

Is your business better suited for a business loan?

  • Ownership is not diluted so your upside remains all yours
  • Future payments are based on regular repayments which can be planned and prepared for
  • You can already demonstrate good trading history or a strong sales pipeline
  • You have an immediate cash flow requirement

Is your business better suited for equity finance?

  • For businesses that can demonstrate rich IP
  • When you need larger amounts of money
  • When you need both cash and additional expertise


The British Business Bank has a range of guidance and resources available to all businesses, including content on managing your cashflow and a list of independent advice services.

The Recovery Loan Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. Visit the British Business Bank’s RLS page.