Growth Guarantee Scheme: The Complete Guide for UK Businesses

The Growth Guarantee Scheme (GGS) is a UK government scheme, run by the British Business Bank, that gives accredited lenders a 70% guarantee on eligible loans and facilities to smaller businesses. It is for viable UK trading businesses that want to borrow for growth, working capital, investment or refinancing but do not have the security or track record a lender would normally want for the full amount. Growth Business Finance (GBF) arranges GGS-backed facilities from £200k up to the scheme limit of £2m per group.

Key facts

• Guarantee: the government guarantees 70% of the lender's outstanding balance, not the borrower. You remain liable for 100% of the debt.
• Size: up to £2m per business group under the scheme. GBF arranges GGS facilities from £200k.
• Products: term loans, revolving credit facilities, overdrafts, asset finance and invoice finance can all be written under the scheme.
• Pricing: set by each lender, deal by deal. The guarantee does not fix or cap the rate. For context, GBF arranges senior term loans from 6.5% a year or 2.5% over Bank Rate, which is currently 3.75%.
• Security: lenders may ask for a personal guarantee, but under the scheme rules your main home cannot be taken as security.
• How to apply: only through an accredited lender, never direct to the government or the British Business Bank.

What is the Growth Guarantee Scheme?

The Growth Guarantee Scheme launched in July 2024 as the successor to the Recovery Loan Scheme. It is delivered by the British Business Bank through a panel of accredited lenders, which includes high street banks, challenger banks and specialist lenders.

The idea is simple. If a borrower defaults and the lender has followed its normal recovery process, the government covers 70% of the lender's remaining loss. That reduces the lender's risk, which means it can approve businesses it might otherwise decline, or lend more than it would on a purely commercial basis.

It is important to be clear about what the guarantee is not. It is not a grant, it is not a subsidy on the interest rate and it does not protect the business or its directors. The business is fully liable for the whole debt, and any personal guarantee you sign remains enforceable in line with the scheme rules.

How a GGS facility works

From the borrower's point of view, a GGS facility looks and feels like any other business loan or facility. The difference sits behind the scenes in the agreement between the lender and the British Business Bank.

The process in practice

1. The lender assesses your business in the normal way, looking at trading, cash flow, affordability and the purpose of the borrowing.
2. The lender decides whether to use the guarantee. Accredited lenders choose which deals to put under the scheme. A strong business may be offered a standard facility instead.
3. The facility is documented as a GGS facility, with the scheme terms built into the agreement.
4. You draw and repay in line with the facility, whether that is a term loan with scheduled repayments or a revolving facility you draw and repay as needed.

Products the scheme can support

The scheme is not a single product. It can sit behind:

• Term loans for investment, expansion, acquisitions or refinancing
• Revolving credit facilities and overdrafts for working capital headroom
• Asset finance for equipment, vehicles and plant
• Invoice finance to release cash tied up in unpaid invoices

Maximum terms vary by product type and the British Business Bank updates its rules from time to time, so always check the current position on the British Business Bank GGS page before relying on a specific term or limit.

Who the Growth Guarantee Scheme suits

GGS is most useful for businesses that are viable and growing but fall slightly outside a lender's normal comfort zone. Typical situations include:

• Asset-light businesses with good margins but little hard security, such as professional services firms and technology businesses
• Growing consumer and food and drink businesses that need to fund stock, capacity or new channels faster than retained profit allows
• Businesses refinancing expensive short-term debt into a more sustainable structure
• Companies funding a specific project, such as new premises fit-out, equipment or a bolt-on acquisition, where the lender wants extra comfort on the unsecured element

It is less suitable for property purchases, where a commercial mortgage is usually cheaper and longer, and for larger working capital needs, where asset based lending from £2m upwards can provide far more headroom than the £2m GGS cap.

Costs and terms

There is no single GGS rate. Each accredited lender prices its own facilities based on your credit profile, the product, the term and the security available. The government guarantee often improves the terms a lender is willing to offer, but it does not set them.

When comparing GGS offers, look at:

• The margin or fixed rate. Many facilities are priced as a margin over Bank Rate, currently 3.75%.
• Arrangement and other fees. These are set by the lender, so compare the full cost rather than the headline rate.
• Repayment profile. Capital repayment holidays, amortisation and balloon payments all affect cash flow.
• Security and guarantees. A personal guarantee may be requested, but your principal private residence cannot be taken as security under the scheme.
• Early repayment terms. Check whether you can repay or refinance without heavy charges if your business outgrows the facility.

As a reference point, GBF arranges senior term loans from 6.5% a year or 2.5% over Bank Rate, and RCFs from 2.5% over Bank Rate, priced deal by deal. A GGS facility should be judged against those mainstream alternatives, not in isolation.

Eligibility and what lenders look at

The British Business Bank sets the scheme eligibility rules, and each lender then applies its own credit policy on top. Broadly, your business must:

• Be carrying out trading activity in the UK
• Fall within the scheme turnover limit. This has been £45m, and an increase to £54m was announced in July 2026, so check the British Business Bank for the limit in force when you apply
• Use the funds for a genuine business purpose
• Not be in collective insolvency proceedings or otherwise in financial difficulty
• Not operate in an excluded sector, such as banking, insurance and certain public sector activities

Meeting the scheme rules does not guarantee approval. Lenders will look at:

• Affordability: whether cash flow comfortably covers interest and repayments
• Trading track record: filed accounts, current management accounts and trends
• Purpose: what the money is for and how it will generate a return
• Existing debt: what you already owe, to whom and on what security
• Management: the experience of the directors and the credibility of the plan

Documents you will need

A well-prepared pack speeds up a credit decision and reduces the number of questions that come back. Expect to provide:

• The last two to three years of filed accounts
• Up-to-date management accounts, ideally less than three months old
• Recent business bank statements
• An aged debtor and creditor list
• A cash flow forecast for at least the next 12 months
• A clear explanation of how the funds will be used
• A schedule of existing borrowing and security
• Director details and, where relevant, personal asset and liability statements

GGS compared with the nearest alternatives

Common mistakes to avoid

• Assuming GGS is cheap money. The guarantee helps the lender, not the rate. Always compare it with a standard facility.
• Going to one lender only. Accredited lenders have different appetites, products and pricing. One decline does not mean the scheme is closed to you.
• Forgetting the group limit. The £2m cap applies across the business group, including any existing GGS borrowing.
• Choosing the wrong product. A term loan for a seasonal working capital need, or an overdraft for a long-term investment, creates problems later.
• Weak forecasts. Lenders still need to see the facility is affordable. A thin or unrealistic forecast is one of the most common reasons for delay.
• Ignoring the bigger picture. If you need more than £2m, or already have significant debt, a wider refinancing may serve you better than a GGS top-up.

How a broker and debt adviser like GBF helps

GBF is a commercial finance broker and debt adviser, not a lender. Our role is to run the process so you reach the right lender with the right structure first time.

1. Initial review. We look at your accounts, forecasts, existing debt and the purpose of the funding, and tell you honestly whether GGS is the best route or whether a standard facility, ABL or a property-backed loan would work better.
2. Structuring. We decide the product, size, term and repayment profile that fits your cash flow.
3. Credit paper. We prepare a clear credit paper that tells your business story and answers the questions lenders will ask.
4. Lender selection. We approach the lenders best suited to your deal from our whole-of-market panel of 650+ lenders, including accredited GGS lenders where the scheme makes sense.
5. Negotiation. We compare terms side by side and negotiate on pricing, fees, covenants and security.
6. Completion. We manage due diligence, legals and conditions precedent through to drawdown.

Before you start, our facility health check is a quick way to see whether your current borrowing is still the right fit, and our business loans page explains the wider range of facilities we arrange.

FAQs

Is the Growth Guarantee Scheme a government loan?

No. The loan comes from an accredited commercial lender. The government provides a 70% guarantee to the lender, but the business borrows from and repays the lender on commercial terms.

How much can I borrow under the Growth Guarantee Scheme?

The scheme allows up to £2m per business group. GBF arranges GGS facilities from £200k. Larger requirements are usually better served by a standard term loan, an RCF or asset based lending.

Do I have to give a personal guarantee?

Lenders may ask for a personal guarantee, depending on the deal. Under the scheme rules, your principal private residence cannot be taken as security.

What interest rate will I pay on a GGS loan?

Each lender sets its own pricing, deal by deal. The guarantee does not cap the rate. Comparing several accredited lenders, and comparing GGS with standard facilities, is the best way to make sure you are not overpaying.

Can I apply for GGS directly to the British Business Bank?

No. You apply through an accredited lender, either directly or through a broker. The British Business Bank publishes the scheme rules and the list of accredited lenders.

Can GGS be used to refinance existing debt?

Yes, refinancing can be an eligible purpose, subject to the scheme rules and the lender's credit policy. It is often worth reviewing your whole debt structure at the same time.

Can a start-up use the scheme?

The scheme does not set a minimum trading period, but lenders need to see the facility is affordable. In practice, businesses with a trading record and reliable financial information have the strongest chance of approval.

Next step

If you are weighing up a GGS facility or any other form of growth finance from £200k, start with check what you could raise for an initial view, or call Growth Business Finance on 020 3432 2341 to talk it through. Finance is subject to status and lender approval.

Tom Renshaw

Founder and Managing Director, Growth Business Finance

Tom arranges business loans, asset based lending and property finance for UK SMEs and mid-market companies. More about GBF