What you need to know about the end of the Recovery Loan Scheme

We are pleased to have supported more businesses across the UK by offering finance under the Government-backed Recovery Loan Scheme (RLS). Offering this scheme alongside our fixed-rate business loans allowed us to say yes to more businesses and help them adapt and grow during challenging times.

As announced in the Spring Budget 2024, the current Recovery Loan Scheme will come to an end on 30 June 2024. It will then be succeeded on 1st July by the Growth Guarantee Scheme, which will run until March 2026 to help more businesses access the finance they need. 

So before the Growth Guarantee Scheme comes into place, here’s a recap of the Recovery Loan Scheme. 

What is the Recovery Loan Scheme?

The current iteration of the Recovery Loan Scheme launched in August 2022. It is a Government-backed loan scheme, designed to support access to finance for UK small businesses as they look to invest and grow.

The Recovery Loan Scheme was designed by the UK Government expressly to improve the terms on offer to businesses in the wake of the Covid-19 pandemic. Money is loaned through accredited lenders, such as Funding Circle, and the Government gives the lender a 70% guarantee on the loans.

That means that if the business can’t repay the loan, the Government will reimburse the lender. Although the borrower remains liable for the full loan amount, the guarantee allows lenders to say yes to more businesses. 

What can I use a Recovery Loan for?

A Government-backed Recovery Loan can be used for any legitimate business purpose, including managing cash flow, funding equipment, investment and growth.

How much can I borrow with a Recovery Loan?

Funding Circle is accredited by the Government-owned British Business Bank to provide business loans of £25,001 to £250,000 under the Recovery Loan Scheme. If you’d like to borrow more, the scheme goes up to £2 million.

Terms are flexible, with Funding Circle Recovery Loans available from 2 to 6 years. There are no fees for full early repayment and you’ll only pay interest on the time you borrow.  

Can I still get a Recovery Loan with Funding Circle? 

Funding Circle will continue to offer Recovery Loans until 30th June 2024, or until our allocation of funds under the scheme runs out.

Offering this scheme alongside our fixed-rate business loans allows us to say yes to more businesses like yours. Simply fill in one 10-minute application, and we’ll assess the right product for you on the best possible terms – with a decision coming in as little as 1 hour.

The Recovery Loan Scheme aims to improve the terms on offer to borrowers. If we can offer a Funding Circle business loan on better terms, we will do so.

What is the Growth Guarantee Scheme?

The Government-backed Growth Guarantee Scheme will replace the Recovery Loan Scheme from 1st July 2024. It is intended that the new scheme will remain broadly unchanged from the current RLS to ensure continuity and consistency.

As RLS comes to an end, we’ll continue to provide our Funding Circle loans, and our ambition is to make loans available under the Growth Guarantee Scheme as soon as we’re able to.

13/05/24: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.