The cash will help firms refinance, restructure and grow after a year of shutdowns and restrictions.
Chancellor Rishi Sunak said the scheme will bridge the gap as Covid crisis lending comes to an end.
He added: “We have stopped at nothing to protect jobs and livelihoods throughout the pandemic and, as the situation has evolved, we have ensured that our support continues to meet businesses’ needs.
“As we safely reopen parts of our economy, our new recovery loan scheme will ensure that businesses continue to have access to the finance they need as we move out of this crisis.”
Banks will offer between £25,001 and £10million under the scheme from today for the rest of the year.
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