Growth Guarantee Scheme launched to boost small business financing

This scheme is the successor to the Recovery Loan Scheme and is expected to support around 11,000 small businesses between 1 July 2024 and 31 March 2026.

So far, the British Business Bank has accredited 41 lenders to participate in the scheme, 20 of whom have confirmed that they are now open for applications under this scheme. Further lenders are going through the accreditation process and will be accredited over the coming weeks (see a link to the accredited lenders at the bottom of this post).

The Growth Guarantee Scheme covers a range of financial products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending. However, not all lenders will provide every type of product.

Scheme features

The minimum amount businesses can access through the scheme starts at £1,000 for asset finance, invoice finance, and asset-based lending, and £25,001 for term loans and overdrafts. The maximum funding available is up to £2 million per business.

Interest rates and fees charged by lenders will vary and will depend on the specific lending circumstances, however it is expected that the lender’s pricing will take into account the benefit of the Government guarantee (a 70% government-backed guarantee against the outstanding balance).

Personal guarantees can be required at the lender’s discretion, in line with their normal commercial lending practices. However, Principal Private Residences cannot be taken as security within the scheme.

You can still apply for the Growth Guarantee Scheme if you’ve taken out a Bounce Back Loan, Coronavirus Business Interruption Loan, Coronavirus Large Business Interruption Loan – as long as your business is eligible. However, this might reduce the amount you could borrow.

There is no set criteria for how the finance must be used. However, it aims to ‘help small businesses to invest and grow’, so will be suitable for business purposes, such as managing cashflow, investment and growth initiatives.

You should note that the assistance provided through Growth Guarantee Scheme, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. More information on subsidies is available here on the British Business Bank website.