The Recovery Loan Scheme (RLS) was a UK government-backed lending scheme, administered by the British Business Bank, that gave accredited lenders a partial guarantee to encourage lending as the economy recovered from the pandemic. It is now closed to new lending and has been succeeded by the Growth Guarantee Scheme. Existing RLS facilities continue on their agreed terms; for new government-backed finance, use the Growth Guarantee Scheme through accredited lenders.
Key takeaways
- The Recovery Loan Scheme was a government-backed lending scheme run via accredited lenders.
- It used a partial guarantee to the lender — borrowers remained fully liable.
- It is closed to new lending and was replaced by the Growth Guarantee Scheme.
- Existing RLS facilities continue on their agreed terms.
- It followed the pandemic-era CBILS and Bounce Back Loan schemes.
- For new government-backed finance, use the Growth Guarantee Scheme.
If you have researched government-backed business finance, you will likely have come across the Recovery Loan Scheme — and may be unsure whether it is still available. The short answer is that it has closed to new lending and been succeeded by the Growth Guarantee Scheme. But understanding what the Recovery Loan Scheme was, how it worked, and where it sits in the lineage of government-backed lending helps make sense of today’s options. This guide explains it clearly.
What was the Recovery Loan Scheme?
The Recovery Loan Scheme (RLS) was a UK government-backed lending scheme, administered by the British Business Bank. Like its predecessors and successor, it worked by giving accredited lenders a partial guarantee against the outstanding balance of the facilities they provided, reducing the lender’s risk and encouraging it to lend. Its purpose was to support businesses’ access to finance as the economy recovered from the pandemic — the “recovery” in its name.
How it worked
The model was the same as the current scheme. Businesses applied to accredited lenders, not to the government. The lender assessed each application using its own criteria within the scheme rules, and if approved, provided the finance. The government guaranteed part of the lender’s risk, but — crucially — the borrower remained 100% liable for repaying the debt in full with interest. The guarantee protected the lender, not the borrower.
Where it sits in the lineage
The Recovery Loan Scheme is one link in a chain of government-backed lending schemes:
| Scheme | Era / focus | Status |
|---|---|---|
| Bounce Back Loan Scheme (BBLS) | Pandemic emergency support | Closed |
| CBILS | Pandemic business interruption | Closed |
| Recovery Loan Scheme (RLS) | Recovery from the pandemic | Closed to new lending |
| Growth Guarantee Scheme (GGS) | Growth and access to finance | Current |
Each scheme built on the last, refining the guarantee model and shifting focus as circumstances changed.
Why it closed
Government-backed schemes run for defined periods and evolve with the economy. As the recovery phase passed, the Recovery Loan Scheme was succeeded by the Growth Guarantee Scheme, which refocused government-backed lending from recovery toward supporting growth and everyday access to finance for smaller businesses. The closing of one scheme to new lending and the opening of its successor is a normal part of how this support evolves.
If you already have an RLS facility
Importantly, the scheme closing to new lending does not affect facilities already in place. If you hold a Recovery Loan Scheme loan, it continues under its agreed terms — you simply repay as normal. Only new applications are affected, and those now go through the Growth Guarantee Scheme.
An existing Recovery Loan Scheme facility isn’t disturbed by the scheme closing — keep repaying on your agreed terms. If you want to refinance or borrow again, that’s done under the current Growth Guarantee Scheme.
Can you refinance an RLS facility?
Refinancing existing debt — potentially including a Recovery Loan Scheme facility — may be possible in some circumstances under the current Growth Guarantee Scheme, subject to the rules, the lender’s policy and any early-repayment terms on your existing facility. If you are considering it, discuss your situation directly with an accredited lender, and compare the total cost of any new facility against your existing borrowing.
What it means today
For an established business seeking government-backed finance now, the route is the Growth Guarantee Scheme, accessed through accredited lenders. Because the mechanism is so similar to the Recovery Loan Scheme, the experience is familiar: you apply to a lender, are assessed on affordability and viability, and repay with interest, with the guarantee operating in the background. Your main home cannot be taken as security, and rates are set commercially, so comparison still matters.
The bottom line
The Recovery Loan Scheme was a government-backed lending scheme that supported businesses through the post-pandemic recovery, using a partial guarantee to accredited lenders. It is now closed to new lending and has been succeeded by the Growth Guarantee Scheme. Existing RLS facilities continue untouched, while new government-backed borrowing goes through accredited lenders under the current scheme. Understanding this lineage helps you focus on the right option today — and compare lenders to get the best terms.
Frequently asked questions
What was the Recovery Loan Scheme?
The Recovery Loan Scheme (RLS) was a UK government-backed lending scheme administered by the British Business Bank. It gave accredited lenders a partial guarantee against the outstanding balance, encouraging them to lend to businesses as the economy recovered from the pandemic.
Is the Recovery Loan Scheme still open?
The Recovery Loan Scheme is closed to new lending, having been succeeded by the Growth Guarantee Scheme. For government-backed finance now, the Growth Guarantee Scheme is the current route, accessed through accredited lenders.
What replaced the Recovery Loan Scheme?
The Growth Guarantee Scheme replaced it, continuing the same core model — a partial government guarantee to accredited lenders — but with a focus on growth and access to finance rather than pandemic recovery.
How did the Recovery Loan Scheme work?
Businesses applied to accredited lenders, which assessed applications using their own criteria within the scheme rules. The government guaranteed part of the lender’s risk, but borrowers remained fully liable for repaying the debt in full with interest.
Did the Recovery Loan Scheme provide grants?
No. It was a loan guarantee scheme, not a grant. Businesses borrowed from lenders and repaid in full with interest; the government simply guaranteed part of the balance to the lender. Grants are separate, non-repayable funding.
I have a Recovery Loan Scheme facility — what happens now?
Existing Recovery Loan Scheme facilities continue under their agreed terms — you simply repay as normal. The scheme closing to new lending does not affect facilities already in place.
What facility types did the Recovery Loan Scheme support?
It supported a range of facilities similar to the current scheme — including term loans, overdrafts, asset finance and invoice finance — delivered through accredited lenders.
Was my main home protected under the Recovery Loan Scheme?
Borrower protections under the government-backed schemes have been broadly similar in spirit. Under the current Growth Guarantee Scheme, a lender cannot take your principal private residence as security. For any current borrowing, the Growth Guarantee Scheme rules apply.
Why did the Recovery Loan Scheme close?
Government-backed schemes run for defined periods and evolve with circumstances. As the recovery phase passed, the scheme was succeeded by the Growth Guarantee Scheme, which refocused government-backed lending toward supporting growth.
Can I refinance a Recovery Loan Scheme facility?
Refinancing may be possible in some circumstances under the current Growth Guarantee Scheme, subject to the rules, the lender’s policy and any early-repayment terms on your existing facility. Discuss your situation with an accredited lender.
Did the Recovery Loan Scheme set interest rates?
No. Rates and fees were set commercially by the accredited lenders, not by the government. This remains true under the Growth Guarantee Scheme, so comparison between lenders matters.
What schemes came before the Recovery Loan Scheme?
It followed the pandemic-era Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS). The Growth Guarantee Scheme is the latest in this lineage of government-backed lending.
How is the Growth Guarantee Scheme different from the Recovery Loan Scheme?
The mechanism is very similar; the main differences are the focus (growth rather than recovery) and the specific rules, limits and timing of the current scheme. Confirm current details with an accredited lender.
Where do I apply for government-backed finance now?
Through an accredited lender delivering the Growth Guarantee Scheme, or via a broker who can identify suitable lenders and compare options.
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