Compare Recovery Loans

  • Government-guaranteed Recovery Loans to support business growth
  • £1,000 to £2 million available under the Recovery Loan Scheme
  • Applications for Recovery Loans have been extended to August 2024
Information written by Connor Campbell Last updated on 11 August 2022.

Recovery Loan Scheme FAQs

What was the Recovery Loan Scheme?

The Recovery Loan Scheme aimed to help businesses build and grow as they came to terms with the effects of the pandemic. This scheme allowed businesses to continue to access support once other government loan schemes (CLBILS, CBILS, BBLS) had closed.

Recovery Loans came with a 70% government guarantee, which meant the government compensated the lender with this percentage of the loan if the borrower was not able to repay it. The guarantee aimed to encourage lenders to approve loans to businesses, as it reduced the risk of the lender not getting its money back.

What could businesses use a Recovery Loan for?

The Recovery Loan Scheme was intended to support businesses and help them grow, but there were no restrictions on what exactly the money should be used for.

Businesses could use a Recovery Loan to improve cash flow, to help with payroll costs, to invest in equipment or to fund any other projects that were useful to their operations.

What was the deadline for Recovery Loan applications?

The Recovery Loan Scheme launched on 6 April 2021 and closed on 30 June 2022.

What businesses were eligible for a Recovery Loan?

From 1 January 2022, you were only eligible for the Recovery Loan Scheme if your business turnover did not exceed £45 million a year.

Some businesses, including banks, building societies, insurers and public sector bodies were not eligible for a Recovery Loan regardless of turnover.

When applying for the Recovery Loan Scheme, businesses had to show lenders that they had been adversely affected by the coronavirus pandemic and that, had there not been the pandemic and the subsequent restrictions, their business would have been viable.

How much could you borrow through the Recovery Loan Scheme?

The Recovery Loan Scheme offered term loans and overdrafts from £25,001 to £2 million per business (and a maximum £6 million per group).

Invoice finance and asset finance from £1,000 was also available under the scheme.

How quickly would I have to pay back the Recovery Loan?

After taking out a Recovery Loan, repayments would start immediately. However, it was possible to choose up to six years to repay term loans and asset finance under the Recovery Loan Scheme, and up to three years to repay overdrafts and invoice finance.

Did businesses need to give a personal guarantee on a Recovery Loan?

With some standard business loans, the business owner/director had to provide a personal guarantee to repay the lender themselves if their business couldn’t.

However, the Recovery Loan Scheme stated that lenders could not take any personal guarantees on credit facilities worth up to £250,000, and that the borrower’s home could not be taken as security.

If you borrowed more than £250,000 under the scheme, lenders were able to ask for a personal guarantee.

Could businesses apply for a Recovery Loan if they had already received government support?

As long as businesses met the scheme’s criteria, they could apply for a Recovery Loan. Businesses that accessed finance from a previous government guaranteed loan scheme, such as the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS), or the Coronavirus Large Business Interruption Loan Scheme (CLBILS), were still eligible for a Recovery Loan.

Would lenders conduct a credit check on businesses that applied for the Recovery Loan Scheme?

Yes, lenders would conduct credit checks and fraud checks on every business that applied for a Recovery Loan. The exact checks and the requirements needed to get a loan varied between lenders.

Could businesses apply for the Recovery Loan Scheme with bad credit?

Businesses with bad credit could apply for a Recovery Loan, although there was no guarantee that they would be accepted. Lenders reviewed each individual application and conducted their own checks to decide if a business met their eligibility criteria for a loan.

Information correct at the time of publishing.

About the author:

Connor is a writer and spokesperson for NerdWallet. Previously at Spreadex, his market commentary has been quoted in the likes of the BBC, The Guardian, Evening Standard, Reuters and The Independent. Read more

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