Government launches new Recovery Loan Scheme (RLS)

On 6th April 2021, the Government launched the Recovery Loan Scheme (RLS) to provide small and large businesses alike the funds they need to recover from the Covid-19 pandemic. Each business can access up to £10 million with the Government guaranteeing 80% of the finance to a network of accredited lenders listed with the British Business Bank.

As RLS is categorised as a business loan, borrowers are 100% liable for the debt. The scheme is open to applicants up to 31st December 2021; however, this date is subject to review. In effect, the RLS replaces the earlier Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) which have been closed to new applicants from 31st March 2021.

Is my business eligible?

Any UK trading business can apply for an RLS loan so long as the following criteria can be demonstrated:

  • The business would be viable were it not for the pandemic.
  • The business has been adversely impacted by the pandemic or government restrictions.
  • The business is not in collective insolvency proceedings (those in scope of the Northern Ireland Protocol will need to meet different eligibility rules).

How is the RLS scheme designed?

The scheme is split into two types of financial support:

  • Term loans or overdraft facilities are offered between £25,001 and £10 million per business and must be repaid within 3-years.
  • Invoice and asset finance is available between £1,000 and £10 million per business and must be repaid within 6 years.

Visit the Government website for more information and to start the application process. Alternatively, details of the scheme and a list of accredited lenders can be found on the British Business Bank website.

How will RLS loans impact my R&D tax credit claim?

In short, there will be no impact on your R&D tax credit eligibility so long as the funds are not used to either fully or partially fund R&D projects. This is because the Government has notified RLS as state aid under the European Commission’s new Temporary Framework for COVID-19.

If you have any questions regarding how the RLS might impact your R&D tax credit claim or want to talk directly with a tax professional about how Cost Care Tax can help you, please contact us on 0330 128 0044 or /

This article is for information purposes only. Cost Care Tax cannot advise on the Recovery Loan Scheme outside of its impact of R&D tax credit claims.

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