Growth Guarantee Scheme

Government-Backed Finance for UK Businesses

The Growth Guarantee Scheme (GGS) is a UK Government-backed initiative designed to help viable businesses access finance for investment and growth. As an independent finance broker, we compare accredited lenders to help find the most appropriate funding solution for your business, saving you valuable time while identifying competitive finance options.

The Growth Guarantee Scheme launched in July 2024 and is the successor scheme to the Recovery Loan Scheme (RLS). It is designed to support access to finance for UK small businesses as they look to invest and grow. The Growth Guarantee Scheme aims to improve the terms on offer to borrowers. If Lenders can offer better terms, they will do so.

The UK Government’s Growth Guarantee Scheme has now been extended until March 31, 2030.

There is also a pilot scheme running for a “Green Growth Guarantee Scheme” which is for renewables and other green assets from a value of £30,000.00.

Growth Guarantee Scheme-backed facilities are provided at the discretion of the Lenders. They are required to undertake their standard credit and fraud checks for all applicants.

Terms, Values, and Assets - Does your requirement fit the scheme?

As the scheme supplements the Lender’s standard offerings, the terms can vary between the Lenders.

Generally, for asset finance, the Growth Guarantee Scheme is available for an agreement term of up to 6 years, and for values £1,000.00 and up. Some Lenders have a different minimum value, such as £25,000.00. The scheme does not place a limit on what assets can be financed, and leaves that to the lender’s standard criteria. This means the scheme can support businesses investing in equipment, machinery, technology, software, renewable energy and many other business assets.

For overdrafts, invoice finance, and asset-based lending the term length is capped at 3 years.

Features - What does the scheme offer?

The Growth Guarantee Scheme aims to provide greater certainty over credit risk, enabling accredited lenders to provide debt finance to more viable SMEs that they wouldn’t otherwise consider. If a lender can offer better terms, they will do so.

Key features include:

Up to £2m per business group: The maximum amount of a facility provided under the scheme is generally £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers;
Wide range of products and assets: GGS 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 GGS, 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 and a fee that is charged to the lender for the 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: GGS-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.

The assistance provided through GGS, 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.

Eligibility - Who can apply?

In order to be eligible to access the scheme your business has to fall under the following criteria:

Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group);
UK-based: The borrower must be carrying out trading activity in the UK and, for most businesses, generating more than 50% of its income from trading activity;
Viability test: The lender must consider that the borrower has a viable business proposition;
Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings;
Subsidy limits: Borrowers will need to provide written confirmation that receipt of the GGS facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive. All borrowers in receipt of a subsidy from a publicly funded programme should be provided with a written statement, confirming the level and type of aid received

The Government guarantee protects the lender, not the borrower. Businesses remain fully responsible for repaying any finance agreement entered into.

Not sure where to start? Speak to a Specialist

01269 844442

info@axisleasing.com

Please review our privacy policy before sending your details