The British Business Bank has introduced the Growth Guarantee Scheme to aid smaller UK businesses in obtaining the finance they need for investment and expansion. Replacing the Recovery Loan Scheme, this initiative aims to support approximately 11,000 businesses from 1 July 2024 to 31 March 2026.
So far, 41 lenders have been accredited under the scheme, with 20 ready to accept applications. The scheme provides various finance options, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending. Businesses can access up to £2 million per group, with minimum amounts depending on the finance type. New lenders interested in joining the scheme can now apply for accreditation.
The Growth Guarantee Scheme's terms are consistent with those of the Recovery Loan Scheme. It offers up to six years for term loans and asset finance and up to three years for overdrafts, invoice finance, and asset-based lending. Businesses that have previously utilised COVID-19 support loans can also apply, although their past borrowing might impact their eligibility.
Interest rates and fees differ by lender. Personal guarantees may be required, but principal private residences cannot be used as security. The scheme gives lenders a 70% Government-backed guarantee, while the borrower remains fully liable for the debt. The British Business Bank manages the Growth Guarantee Scheme on behalf of the Secretary of State for Business and Trade.
This scheme offers smaller UK businesses a valuable opportunity to secure the financing they need for growth and development.
Talk to us about your business.
