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Compare Recovery Loan Scheme Loans

Loans for businesses of every size and industry, from top UK lenders including:

2 products
  • Funding Options Recovery Loan Scheme logo

    Funding Options Recovery Loan Scheme

    • Funding Options have helped 13,000+ businesses secure £650m+ in funding. Excellent rated service
    • Access up to 120 lenders via a single application in minutes
    • Instant offers and quotes available. Team of Finance Specialists are on hand to help
    • Minimum turnover
    • Available amounts
      £5,000 to £500,000
    • UK Available terms
      1 to 6 years
  • Swoop Funding Recovery Loans Scheme logo

    Swoop Funding Recovery Loans Scheme

    • Simple, secure and speedy search of 1,000 funding providers without affecting your credit rating
    • Free access every type of finance including the Recovery Loan Scheme
    • Online management allows you to find funding opportunities and track applications
    • Minimum turnover
      £100,000 p.a.
    • Available amounts
      £25,000 to £2,000,000
    • UK Available terms
      3 months to 6 years

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. Use the sorting options at the top of the comparison table to order by other criteria.

What is a business loan?

A business loan is a form of finance that can be used to help support and expand your organisation.

As with personal loans, you borrow a sum of money, and pay it back, with interest.

One of the most important differences between personal loans and business loans is that with a personal loan, you will be personally liable for repaying the amount you have borrowed.

With a business loan, as long as the appropriate company structure is in place, that responsibility falls to the business instead. This will not be the case, however, if you are a sole trader, or you have secured your business loan with a personal guarantee.

You can also typically borrow more through a business loan, while the interest payments on your business loan may be tax deductible unlike payments on a personal loan.

Types of business loan

Secured business loans

Secured business loans require that you put down an asset such as property as security. Secured loans often come with lower interest rates than unsecured loans as they represent less risk for the lender. They may also give you access to a larger loan amount over a longer term. However, secured loans come with the added risk that you could lose your assets if you miss the payments.

Unsecured business loans

Unsecured business loans are a type of finance that does not require security. These types of loans tend to have higher interest rates because there is a greater risk of the lender losing money if you can't pay off what you owe. Unsecured business loans also require a good financial history and credit rating as evidence that the business will be able to repay the loan.

Government loans

There may be government-backed business loans you can access. Examples include the Recovery Loan Scheme, introduced to help with the financial stresses caused by the Covid-19 pandemic, which has now been extended. What schemes are available can vary depending on government policy and changing economic circumstances across the country. So it can be useful to regularly check the Department for Business, Energy & Industrial Strategy's search tool for guidance on the business loan schemes available in your region.

Start up business loans

The Start Up Loan Scheme is a government-backed fund that currently offers personal loans of up to £25,000 to UK businesses owners that have been fully trading for less than 36 months or those looking to start a business. You can apply for free, and there are no early repayment charges. If your application is successful, you'll also get up to 12 months of free mentoring. Government Start Up Loans have a fixed annual interest rate of 6% and must be repaid over a period of one to five years.

Small business loans

Small business loans are for start ups and small businesses to access funding. They can be used for a variety of purposes from hiring new staff to managing cash flow. As with all loans, small business loans are repaid over an agreed time period with interest. Large business loans tend to be cheaper than small business loans because there is less perceived risk with lending to a bigger company.

Recovery Loan Scheme FAQ

What is the Recovery Loan Scheme?

The Recovery Loan Scheme originally 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.

Since 1 August 2022, however, the need to prove the impact of Covid-19 has been removed as part of the scheme’s eligibility criteria.

Recovery Loans come with a 70% government guarantee, which means the government compensates the lender with this percentage of the loan if the borrower was not able to repay it. This guarantee aims to encourage lenders to approve loans to businesses, as it reduces the risk of the lender not getting its money back.

What could businesses use a Recovery Loan for?

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

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

What is the deadline for Recovery Loan applications?

The Recovery Loan Scheme launched on 6 April 2021 and has since been extended multiple times, most recently to 30 June 2024.

What businesses are eligible for a Recovery Loan?

From 1 January 2022, you are 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 are not eligible for a Recovery Loan regardless of turnover.

Since 1 August 2022, when applying for the Recovery Loan Scheme, businesses no longer need to show lenders that they have 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 can you borrow through the Recovery Loan Scheme?

The Recovery Loan Scheme offered term loans and overdrafts from £25,001 to £2 million per business group. For businesses operating within the Northern Ireland Protocol, the cap per business group is reduced to £1 million.

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

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

After taking out a Recovery Loan, repayments start immediately. However, it is 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.

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

Under the new rules introduced on 1 August 2022, lenders can take personal guarantees ‘in line with their normal commercial lending practices’.

However, Principal Private Residences remain off limits, and cannot be taken as a security when applying for a Recovery Loan.

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

As long as businesses meet the scheme’s criteria, they can 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), are still eligible for a Recovery Loan.

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

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

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

Businesses with bad credit can apply for a Recovery Loan, although there is no guarantee that they will be accepted. Lenders review each individual application and conduct their own checks to decide if a business meets their eligibility criteria for a loan.

Information correct at the time of publishing.