Recovery Loan Scheme – FAQs

We take a look at the new Recovery Loan Scheme being offered by the government.


What is the Recovery Loan Scheme?

The Recovery Loan Scheme is a new government loan scheme that will replace the now closed Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS). Recovery Loans Scheme (RLS) allows qualifying businesses to borrow up to £10 million – either as term loans, overdrafts, invoice finance or asset finance.

Is my recruitment business eligible for the Recovery Loan Scheme?

You can apply for the RLS even if you’ve already taken out a loan via the now closed Coronavirus Business Interruption Loan Scheme or Bounce Back Loan Scheme. 

If you want to apply for the RLS, you’ll need to show that your recruitment business:

  • Is trading in the UK
  • Is viable or would be viable were it not for the pandemic
  • Has been impacted by the coronavirus pandemic
  • Is not in collective insolvency proceedings (unless your business is in scope of the Northern Ireland Protocol in which case different eligibility rules may apply)

Which organisations are not eligible for the scheme?

Some organisations are not eligible for the Recovery Loan Scheme. Organisations that fall into one of the categories below won’t be able to apply for a loan.

Organisations that are NOT eligible include:

  • banks, building societies, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

What can I borrow using the Recovery Loan Scheme?

If your recruitment business meets the criteria for the scheme, you can apply for a Recovery Loan from one of the approved lenders that have signed up to the scheme. Your options include:

  • Term loans or overdraft – you can borrow between £25,001 and the lesser of £10 million, 25% of 2019 turnover or double the wage bill of 2019.
  • Invoice finance or asset finance – you can borrow between £1,000 and the lesser of £10 million, 25% of 2019 turnover or double the wage bill of 2019.

How does the Recovery Loan Scheme differ from CBILS?

In many ways, the Recovery Loan Scheme is very similar to CBILS. But there are some crucial differences that you should be aware of before deciding on whether to apply.

What has stayed the same?What is different?  
No personal guarantees up to £250k. Interest and fees will be paid by the business from the outset: companies would be required to meet the costs of interest payments and any fees associated with the facility.
Same criteria for UK trading companies, being a viable business that is not in financial difficulty.Starts from £25k and goes up to £10m.
Public sector, banks, building societies, insurers and reinsurers, and state funded primary and secondary schools cannot apply.No turnover limit for applications (£45m previously).
Finance terms are up to six years for term loans and asset finance facilities.No more secured product.
For overdrafts and invoice finance facilities, terms will be up to three years.A business can apply for the Recovery Loan Scheme even if it has an existing BBL, CBIL or Coronavirus Large Business Interruption Loan (CLBIL).
The government guarantees 80% of the finance to the lender to ensure they continue to have confidence to lend.Anything borrowed under CBILS or CLBILS will count towards a business’ maximum amount.
A borrower’s principal private residence cannot be taken as security.

Why get Recruitment Accountants involved?

Our partnership with Capitalise gives us access to their online platform which enables us to reach far more lenders with just one application. Our experience and knowledge of your recruitment business means we know what lenders are looking for and can present your business information in a way that provides a 4x greater chance of successfully securing the lending your recruitment business needs with the most suitable terms.

For more information on the scheme and eligibility, then please download the Recovery Loan Scheme Data Sheet from our partners at Capitalise.

If you need additional working capital to kick-start your recovery process or you’re unsure whether RLS is right for your business, then please do get in touch.

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