The Recovery Loan Scheme still exists, but not under that name. It was extended and renamed the Growth Guarantee Scheme, which is open now, gives the lender a 70% government guarantee, and supports facilities up to £2 million for businesses with turnover up to £45 million. An expansion announced in July 2026 raises the turnover cap to £54 million and extends terms to ten years.
What happened to the Recovery Loan Scheme
The RLS began as a pandemic-era facility and was then extended and rebranded: the Growth Guarantee Scheme is, in the government's own words, an extension to the Recovery Loan Scheme, which has been renamed. So a business researching the RLS is researching the right thing under the wrong name.
One caution if you go looking: the gov.uk Recovery Loan Scheme guidance page is stale and still describes the scheme as running to mid-2022 with no closure notice on it. Work from the Growth Guarantee Scheme page instead.
How the Growth Guarantee Scheme works
It is a guarantee to the lender, not a grant or a subsidy to the borrower. The government guarantees 70% of the loan balance for participating lenders, which reduces the lender's loss given default and so makes them willing to lend where they otherwise would not.
The key terms:
- Maximum facility — £2 million per business group;
- Turnover cap — the business must not exceed £45 million;
- Trading test — more than 50% of turnover must come from trading activity;
- Viability — the business must be viable, and not in difficulty or in insolvency proceedings;
- Product range — term loans, overdrafts, asset finance, invoice finance and asset-based lending, so it is not only a term loan scheme;
- Access — only through accredited lenders, with the scheme administered by the British Business Bank on behalf of the Secretary of State for Business and Trade.
The point most often misunderstood is what the guarantee does for the borrower, which is nothing directly. The British Business Bank's standard position is that the borrower remains fully liable for the debt — the guarantee protects the lender's position, not yours. Treat a scheme-backed loan as an ordinary commercial borrowing for every purpose except the lender's credit decision.
Personal guarantees
Worth knowing before signing. Primary residences are already excluded from personal guarantees supporting GGS loans, and a mandatory code of conduct for accredited lenders on personal guarantees is planned.
That does not mean no personal guarantee will be sought — it means your home cannot be the security for it under this scheme. Anything else a lender asks to be guaranteed is negotiable in the ordinary way, and worth negotiating.
The July 2026 expansion
An expansion was announced on 13 July 2026:
- Turnover cap rising from £45 million to £54 million;
- Maximum term extended from six to ten years for loans up to £1.1 million;
- Scale — an additional £2 billion of SME lending a year by 2028/29, taking the total to £3.35 billion a year, expected to support around 12,000 more businesses annually.
Treat those as announced rather than in force. The announcement did not give an effective date, and gov.uk still shows the £45 million cap — so a business sitting between £45m and £54m of turnover should check current eligibility with an accredited lender rather than assuming the higher figure applies today.
Is the scheme closing?
No end date has been published. The government has committed to the scheme on a "longer-term footing", and the published material gives no closure date — which is a change from the RLS, which ran in defined windows.
Be sceptical of any specific end date you see quoted for the GGS. Dates circulate that belong to unrelated schemes, and none of them appears on the government's own pages.
When it is the right answer
The scheme helps in one specific situation: the business is viable and the lending proposition is sound, but the lender's credit appetite falls short — usually because of limited security, a short trading history, or a sector the lender treats cautiously. The guarantee closes that gap.
It does not help where the underlying problem is the numbers. A business borrowing to fund losses will be declined under the scheme as readily as outside it, and the viability test exists precisely to catch that. Nor is it a cheaper route by default: pricing is the lender's, and a scheme-backed facility can cost more than conventional lending secured on property.
Before approaching a lender, three things are worth having ready: a short-term cash flow forecast that shows what the money is for and how it is serviced, management accounts recent enough to be credible, and a clear answer on what security is available. Lenders decline more applications for weak information than for weak businesses. Our guides to cash flow monitoring and debt advisory cover the preparation and the wider funding options.
Acumon supports businesses raising debt through financial modelling and management accounts, with business health check work where the funding question is really a performance question. If a lender has already declined you, the forecast is usually the thing to fix before the next conversation.