COVID-19 interruption schemes: accessing funding

Wednesday March 25, 2020

COVID-19: Recovery Loan Scheme

Businesses are the lifeblood of the UK and rightly one of the first areas of the economy the government moved to protect when launching its relief efforts in response to Coronavirus.

In these turbulent times, access to government-backed funding has proven critical for many businesses during the pandemic.

Following the conclusion of deployment under the Coronavirus Business Interruption Loan scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Bounce Back Loan Scheme (BBLS) which together delivered £79 billion of lending to 1.67 million borrowers, the British Business Bank launched the Recovery Loan Scheme (RLS) on 6 April 2021 to support businesses as they recover and grow from the coronavirus pandemic.

Applications are initially available via accredited lenders until 31 December 2021 if COVID-19 has affected your business and finances utilised for any legitimate business purpose – including managing cashflow, investment and growth.

When looking to borrow, applicants should first approach their current finance provider – ideally via their website.

RLS Headlines

The scheme allows lenders to provide facilities from £25,001 up to £10 million, for 3 months up to six years for term loans and asset finance, and for 3 months up to three years for overdrafts and invoice finance.

It is important to note that as the scheme provides a state-backed guarantee to the lender, the business will be liable for the full amount of the loan. The government guarantee will step in if the business subsequently fails and is unable to repay the loan. This therefore allows lenders to provide funding where they would normally require security from the assets of the borrower.

The RLS will not require a refinancing of any existing CBILS, CLBILS or BBLS and the interaction with such facilities will be at the discretion of the participating lenders.


Any UK-based business impacted by the pandemic (there is no turnover cap) can access the RLS through a participating scheme lender, absent from the business being in collective insolvency proceedings. If your existing funder is not part of the scheme, speak to your clearing bank or one of the other specialist providers. Each lender will have its own lending criteria and therefore you may need to make a few calls to explore this.

You must be able to demonstrate that, were it not for the COVID-19 pandemic, your business would be considered viable by the lender. The lender must also believe that the provision of this funding will enable your business to trade out of any short-to-medium-term difficulty.

Costs and repayment

Arrangement fees, interest and any other fees must be settled by the borrower with no cost coverage from the scheme or government. You may need to make capital repayments on term loans or asset finance. However, we would expect that short-to-medium-term capital repayment holidays may be available subject to lender assessments.

Total costs under the facilities are capped at 14.99 per cent per annum (including upfront fees), and upfront fees can be no greater than 5.00 per cent of the total facility amount.


For any loans over £250,000, the funder will require security (usually by way of a debenture or floating charge) over your business’ assets. Personal guarantees may still be required (on facilities over £250,000), at a lender’s discretion, for such facilities, but they exclude the Principal Private Residence (PPR).

Lending requirements

Key things to have in place when speaking to your lender are:

  1. The last two financial years’ accounts and year to date management accounts
  2. Short term weekly cashflow forecast (13-weeks) including aged creditors and aged debtors
  3. Current year forecast outturn and two years of financial forecasts (the challenge to forecasting at this time will be understood by lenders and should reflect your best assessment of the impact on the business)
  4. Details of how the business has been affected by COVID-19 and management’s plan to trade out of the situation
  5. If personal guarantees are required completion of an assets and liability statement by relevant directors or shareholders
  6. The steps the shareholders have taken to exhaust all other options to support the business (including equity injections)

Please note, lenders will be required to undertake credit and fraud checks for all applicants. When making their assessment, lenders may overlook concerns over short-term to-medium term performance owing to the pandemic. The checks and approach may vary between lenders.

Please see above our download, a full checklist of information to be reviewed and available to support COVID-19 lending applications.

We are on hand to support businesses through the ongoing challenges of COVID-19. If you have any questions about accessing or applying to the scheme, please do not hesitate to contact us.

A list of current accredited lenders for RLS, along with further details of the schemes are available here.


Related team

Tom Cox

Tom Cox

Tom Cox

  • Partner
  • Debt Advisory
  • London West End