Government-backed business loans
Find out how government-backed business loans work and apply for finance under the Government's Recovery Loan Scheme (RLS)
Apply as a limited company without affecting your credit score
Apply online in 10 minutes
Decision in as little as 1 hour
Borrow £10,000 to £500,000
Rates from 6.9% per year
What is a government-backed business loan?
Government-backed business loans work very much like commercial business loans offered by banks and other lenders, with the exception that they are funded or guaranteed by the UK Government. This type of finance makes essential funding available to new and existing businesses owners.
Do government-backed loans differ from government grants?
Government-backed business loans shouldn't be confused with government grants. The main difference is that loans are repayable, whereas grants are not. While applying for a business grant rather than a loan may seem like the obvious choice for this reason, keep in mind that government grants are limited and fewer applications are accepted.
What can government-backed business loans be used for?
Government-backed business loans help small UK businesses gain the finance they need to grow and succeed. Your business loan can be used for almost any legitimate business purpose, providing it supports trading activity in the UK.
Government-backed business loans can help to
- Buying equipment
- Paying staff wages
- Marketing campaigns
- Purchasing stock
- Covering revenue gaps
- Managing uncertainty
£16 billion
LENT TO BUSINESSES
Applying is quick and easy
- 1
Check if you qualify in 30 seconds
See if you’re eligible without affecting your credit score
- 2
Apply online in 10 minutes
Complete our simple form with your details, and we’ll only ask for supporting documents if we need them
- 3
Get approved in as little as 1 hour
If approved, you’ll receive no-obligation offer with your personalised rate
- 4
Get your funds in a couple of days
Once you accept your offer we'll deposit the money into your account - typically within 48 hours
Here to help if you need us
Contact our UK-based team if you have any questions
How do government-backed business loans work?
Government-backed business loans (such as the Recovery Loan Scheme or the now closed Bounce Back Loan Scheme) are issued by British Business Bank-accredited lenders and come with a guarantee by the government. This means that, if the borrower is unable to repay the loan in full, the UK Government promises to pay a percentage of the loan back to the lender.
It’s important to note that, despite the guarantee, when taking such a loan the borrower is liable for the total cost of the loan. The guarantee only kicks in if the business is unable to pay the debt, for example because it has ceased trading.
Why apply for a government-backed loan?
Government-backed loans are advantageous in that the risk to the lender is reduced, therefore they can approve more applications. Depending on the loan scheme, it may also come with features or benefits that you don’t normally see with other loan products.
Types of government-backed loan
The UK Government has offered several different types of business loan over recent years, including:
- Low interest loans
- Government-guaranteed loans (eg. the Recovery Loan Scheme)
Finance under the Recovery Loan Scheme is currently available in the form of term loans, overdrafts, invoice financing and asset financing.
Some government-backed funding programs run indefinitely while others, such as the recent coronavirus loan schemes, are open for a fixed period.
Bobbin Bicycles
Do I qualify for a government-backed loan via the Recovery Loan Scheme (RLS)?
To receive a loan from Funding Circle under the Government’s Recovery Loan Scheme (RLS), you’ll need to meet the following criteria:
- Business has been impacted by coronavirus
- Business is trading in the UK
- Minimum of 2 years’ trading history
- Loan is for business purposes (i.e. working capital or investment, and to support trading in the UK)
To help as many businesses as possible, we’ll look at a business' performance over a longer period of time to ascertain whether it has a viable business proposition regardless of the impact of Covid-19.
Small Business Loans
Learn how a fast, affordable loan could help your business.