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.

The new iteration of the Recovery Loan Scheme (RLS) launched in August 2022 and is designed to support access to finance for UK small businesses as they look to invest and grow.

The Recovery Loan Scheme aims to improve the terms on offer to
borrowers. If a lender can offer a commercial loan on better terms, they will do so.

Businesses that took out a CBILS, CLBILS, BBLS or RLS facility before 30 June 2022 are not prevented from accessing RLS from August 2022, although in some cases it may reduce the amount a business can borrow.

Recovery Loan Scheme-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.

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.

Up to £2m facility per business group: The maximum amount of a facility provided under the scheme is £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts.

A borrower in scope of the Northern Ireland Protocol may borrow up to £1m per business group, unless such borrower operates in a sector where aid limits are reduced, in which case the maximum that can be borrowed is subject to a lower cap. These include agriculture, fisheries / aquaculture and road freight haulage.

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

Personal Guarantees: Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security
within the Scheme.

Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.

Subsidy: The assistance provided through RLS, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the
amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. All borrowers in receipt of a subsidy from a publicly-funded programme should be provided with a written statement, confirming the level and type of aid received. Borrowers will need to provide written confirmation that receipt of the RLS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive.

Northern Ireland Protocol: All borrowers will need to answer some questions to determine whether they are inside or outside the scope of the Northern Ireland Protocol, to determine the relevant subsidy limit and hence the potential maximum amount they can borrow under RLS.

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

Paul Taberner, MD of Debt - 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?

Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).

UK-based: The borrower must be carrying out trading activity in the UK.

No Covid-19 impact test required: Unlike with the previous phases of the scheme, for most borrowers there is no requirement to confirm they have been affected by Covid-19. For charities and Further Education colleges, confirmation of Covid-19 impact will still be required in some instances.

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.

Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings.

Purpose: the facility must be used to support trading in the UK and cannot be used to support certain export related activities. There are certain restrictions on the use of proceeds of facilities in the agriculture, fisheries and aquiculture, and road freight transport sectors for borrowers impacted by the Northern Ireland Protocol.

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.