Growth Guarantee Scheme, successor to Recovery Loan Scheme, launches to help small businesses access finance
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Posted: Thu 11th Jul 2024
The Growth Guarantee Scheme, which aims to help around 11,000 smaller businesses invest and grow, has launched.
The initiative is the successor to the Recovery Loan Scheme, which was originally set up in 2021 to assist businesses to access finance and recover from the coronavirus pandemic.
The Growth Guarantee Scheme was announced in this year's Spring Budget by former chancellor Jeremy Hunt.
It runs until 31 March 2026 and provides a 70% government-backed guarantee. The borrower always remains 100% liable for the debt.
More than 40 lenders have been accredited for the scheme. As of 8 July, 20 lenders are open for applications.
Growth Guarantee Scheme terms
Up to £2m per business group: The minimum and maximum amount of the facility varies according to the business's circumstances and the type of facility. Maximum facility sizes are up to £2m per business. 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: The Growth Guarantee Scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products.
Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts, invoice finance and asset-based lending available from three months up to three years.
Access to multiple schemes: Businesses that took out a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) or a Recovery Loan Scheme (RLS) facility before 30 June 2024 are not prevented from accessing the Growth Guarantee Scheme, but borrowing under these schemes may reduce the maximum amount the borrower is eligible for.
Pricing: Interest rates and fees charged by lenders will vary and will depend on the specific lending proposal. The lender's pricing will take into account the benefit of the government guarantee.
Personal guarantees: Personal guarantees can be taken at the lender's discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the scheme.
Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
Decision-making delegated to the lender: Growth Guarantee Scheme-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.
How to access the Growth Guarantee Scheme
Further information on the Growth Guarantee Scheme, including the current list of accredited lenders, is on the British Business Bank website.
Related funding resources
How to raise money for your start-up
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