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The Government Recovery Loan for Amazon Sellers Loans: UK

April 13, 2021 by Andrew Minalto
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Up To £10 Million Finance Available for UK Amazon Sellers

While some businesses have seen exponential growth during the last year of covid and lockdowns, with ecommerce and Amazon FBA in particular seeing huge increases in demand and sales, others have really struggled through the uncertainty and repeated lockdowns.

The government has had a number of schemes designed to support businesses, large and small, with the Bounce Back Loan scheme alone providing loans for over 1.5 million businesses. 

Of course it goes without saying that not all businesses who took advantage of these loans really needed them, but the 100% government backed loans with no interest or repayments for the first 12 months were of course very enticing for businesses and sole traders and too hard to turn down. 

While that scheme closed at the end of March, so you can no longer apply for it, the government has introduced a new Recovery Loan Scheme to replace it.  

So Who’s Eligible for the Recovery Loan Scheme? 

There are only a few very simple eligibility requirements. You can apply for the RLS if:

  • Your business is trading in the UK
  • Your business is viable / would be viable if not for COVID-19
  • Your business is not in collective insolvency proceedings

There are a few industries which are automatically ineligible for the Recovery Loan Scheme and these are:

  • Banks, building societies, insurers, and reinsurers
  • Public sector bodies
  • State funded primary and secondary schools

And that’s it. As long as you meet these requirements you can apply for the loan and use it as an Amazon Loan for your business. And surprisingly even if you’re received a government loan from any of the previous schemes, you can still apply for this on top.

How Much Can You Get from the Recover Loan? 

A business can receive up to £10 million through the Recovery Loan Scheme, though the amount depends on the type of finance being offered, with 4 different options:

  • Term loans
  • Overdrafts
  • Invoice finance
  • Asset finance

Term loans and overdrafts can be offered above £25,000 and up to £10 million while invoice or asset finance can be offered between £1,000 and £10 million.

And the length of the loan will also depend on what type of finance is used, with up to 3 years for overdrafts and invoice finance and up to 6 years for loans and asset finance.

But please bear in mind that being eligible doesn’t mean you’ll automatically get a loan! Any loans made in the Recovery Loan Scheme are guaranteed by the government up to 80%, so the lender is still liable for the remaining 20% and ultimately, it’s down to them to make the final decision on your application.

How to Apply for the Recovery Loan Scheme? 

The RLS is managed by the British Business Bank, similar to how the Bounce Back Loans worked, and they have a list of accredited lenders on their website. There are currently 18 lenders offering Recovery Loans, including the big high street banks such as Barclays, HSBC, Lloyds, Natwest, Santander, RBS and a number of others.

UK banks offering recovery loans

 At the moment “online banks” such as Revolut, Starling etc. aren’t on the list of accredited lenders and that’s unlikely to change. Worse access to finance is one of the downsides to using these newer banks vs the traditional high street options, something I went over in our recent comparison: Best Bank Accounts for Amazon FBA Sellers

But back to the RLS and you can find the full up to date list of lenders here:

Now the application and process can differ between each lender, so let’s quickly run through a couple of exams to see how it works. 

Lloyds Bank 

Starting with Lloyds, you have to have been an existing customer of theirs for a minimum of 12 months to apply but this doesn’t necessarily have to have been a business account. You can still apply even if you’re a personal Lloyds bank customer.

And for anyone dreaming of getting a nice £1,000,000 loan for their Amazon FBA business, there are of course restrictions on the loan amount and according to Lloyds, your loan should be:

  1. Less than twice your annual wage bill for 2019 or the last available year
  2. Less than a quarter of your 2019 total turnover
  3. Less than you’d need to cover your regular expenses over the next 18 months

And they want you to cover all of these criteria, not just one! So say for example your 2019 turnover was £350,000, meaning on point 2 you could get a loan of up to £87,500 BUT your annual wage bill for 2019 was £35,000, meaning on point 1 you could get a loan of up to £60,000, the lower amount will override the higher… so in this case your maximum loan would be £60,000 rather than £87,500.

I hope that makes sense!

Lloyds don’t currently offer the ability to make your application online if you don’t already have a business account with them, but after completing a few questions they give you contact details to call and speak to someone about a loan. Pretty simple, as shown below:

Lloyds lets you enquire with just one click


Unlike Lloyds, HSBC is currently only accepting applications from current business customers but there’s no minimum time requirement for that so you can register for an account with them and then immediately apply for the Recovery Loan Scheme. 

With HSBC you can apply online through their dedicated RLS application portal. 

HSBC application details

And to complete the application you’ll need the following info ready: 

  • Current company information
  • Loan amount
  • Details of the impact of Covid-19 to your business
  • Annual accounts (where applicable) for 2019, 2020
  • 12 months forecast turnover

Again these loans are still assessed by the bank in their normal way, following all their usual procedures, so it’s not just a formality. 

You’ll have to self-certify that your business has been adversely affected by covid and you’ll also have to be able to show that your business will be able to generate sufficient profit to be able to pay the loan back every month. 

And on this point HSBC have also given info on the interest rate that will be applied to loans.
For loans between £25,000 and £300,000 there’s a 4.49% interest rate for loans up to 3 years and 4.99% for loans up to 6 years.

I’m quite surprised to see HSBC say that these rates will apply to all loans as I would’ve expected it to change based on the individual business and each application, as these rates are actually very reasonable.

Taking a £25,000 loan over 6 years as an example, that 4.99% will mean monthly repayments of just over £400.

Most other banks also have the ability to apply online so take a look at whoever you’re with to see what the process is.

And that’s about it for today’s post. Just one last friendly reminder that these are loans – not gifts or grants, and you will have to pay them back, plus interest.

So please don’t just blindly apply for the sake of it.

However I know how badly the repeated lockdowns have affected many businesses here in the UK, so it’s a good scheme to take advantage of if it’ll help you and your business.

As the Recovery Loan Scheme only launched April 6th, it’s still very early days, so we’ll see how things progress and how the process works out in real life and as always I’ll be here to help and update you as we learn more.

Otherwise, until next time!

All the best,

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