The Growth Guarantee Scheme with the British Business Bank

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme, designed to facilitate access to finance for smaller UK businesses aiming to invest and grow. Launched on 1 July 2024, this scheme offers a variety of financial products through accredited lenders, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending.

Businesses can use the finance for any legitimate business purpose, such as managing cash flow and investment, provided they can afford the additional debt. The British Business Bank administers the scheme on behalf of the Secretary of State for Business and Trade.

Key Features of the Scheme

• Loan Limits: Up to £2 million per business group for those outside the Northern Ireland Protocol; up to £1 million for those within the Protocol. Minimum facility sizes start at £1,000 for asset finance, invoice finance, and asset-based lending, and £25,001 for term loans and overdrafts.
• Range of Products: Supports term loans, overdrafts, asset finance, invoice finance, and asset-based lending, though not all lenders will offer every product.
• Term Length: Term loans and asset finance are available for three months to six years, while overdrafts, invoice finance, and asset-based lending are available for three months to three years.
• Access to Multiple Schemes: Businesses that utilized CBILS, CLBILS, BBLS, or RLS before 30 June 2024 can still access GGS, though previous borrowing may affect eligibility.
• Pricing: Interest rates and fees vary by lender and reflect the benefit of the government guarantee.
• Personal Guarantees: May be required at the lender’s discretion, but Principal Private Residences cannot be used as security.
• Government-Backed Guarantee: Provides lenders with a 70% guarantee on the outstanding balance after recovery processes, while borrowers remain fully liable for the debt.
• Lender Discretion: Lenders decide on GGS-backed facilities and must perform standard credit and fraud checks.

The assistance provided through the GGS is considered a subsidy, and there is a limit on the amount a borrower and their group can receive over a rolling three-year period. Previous subsidies may reduce borrowing limits.

Eligibility Criteria

• Turnover Limit: Available to smaller businesses with a turnover up to £45 million (on a group basis if applicable).
• UK-Based: The borrower must be conducting trading activities in the UK and, in most cases, generating more than 50% of income from trading activities.
• Viability Test: The lender must assess the borrower as having a viable business proposition.
• Business in Difficulty: The borrower must not be in financial difficulty or insolvency proceedings.
• Subsidy Limits: Borrowers must confirm that receiving GGS support will not exceed their subsidy limits. All recipients of publicly funded subsidies must provide a written statement of the aid received.

For more information about the Growth Guarantee Scheme, please visit the British Business Bank website.