Am I eligible for the Recovery Loan Scheme (Growth Guarantee Scheme)?

Full answer

The Recovery Loan Scheme was the government-backed lending programme that succeeded the Covid-era CBILS and Bounce Back Loans; it has since been renamed and continued as the Growth Guarantee Scheme. It does not lend directly. Instead, the British Business Bank gives accredited commercial lenders a partial government guarantee on the facility, which encourages them to lend to viable businesses that might otherwise be declined. The borrower remains 100% liable for repaying the debt - the guarantee protects the lender, not you. Who it affects: UK-based smaller businesses (across most sectors) that are trading commercially and judged viable by the lender. You generally must not be in collective insolvency proceedings. Facilities can be term loans, overdrafts, invoice finance or asset finance. The lender runs the credit, affordability and turnover assessment under its own criteria, so two lenders may reach different decisions on the same business. Key mechanism: because it is a guarantee scheme, eligibility is set partly by the British Business Bank rules (UK trading, viability, sector and subsidy limits) and partly by each lender's own appetite. Personal guarantees may be required above a threshold the lender sets, though a Principal Private Residence is typically protected. A 2026/27 point to remember: interest paid on a qualifying business loan is normally a deductible expense, reducing taxable profit. For a company that lowers the Corporation Tax bill (19% on profits up to GBP 50,000, 25% above GBP 250,000, with marginal relief between). For a sole trader it reduces profits taxed through Income Tax and Class 4 NI. Specific scheme caps, fees and guarantee percentages change between scheme iterations, so confirm the current terms with an accredited lender and the British Business Bank before applying. Model the after-tax cost of repayments using the relevant calculator.

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