The British Business Bank’s Growth Guarantee Scheme increases lending capacity
The British Business Bank has announced an update to its Growth Guarantee Scheme.
On 13th April 2025, Rachel Reeves, Chancellor of the Exchequer, announced that the British Business Bank Growth Guarantee Scheme will be increasing its lending capacity by an additional £500 million. This increase in funding is aimed at helping small businesses which may be impacted by the changes in global tariffs.
Read below to understand the Growth Guarantee Scheme as a self-employed professional or small business.
Features of the British Business Bank Growth Guarantee Scheme
The Growth Guarantee Scheme (GGS) is the successor of the Recovery Loan Scheme, and is intended to help viable businesses access the finance they may struggle to obtain during periods of economic uncertainty.
According to the official British Business Bank website, the key features of the GGS are:
- Up to £2 million per business group: The maximum amount generally provided under the scheme is £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: The GGS supports a broad range of finance solutions. The additional capacity for the scheme is intended to support term loans, overdrafts and other products that help support cashflow challenges. However, not all lenders will be able to offer all products.
- Pricing: Interest rates and fees charged by lenders vary and depend on the specific lending proposal. The lender’s pricing will consider the benefit of the Government guarantee and a fee that is charged to the lender for the guarantee.
- 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 checks and fraud checks for all applicants.
Eligibility criteria
To apply for help from the GGS, you must meet the eligibility criteria stated by the British Business Bank:
- Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45 million.
- 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 collective insolvency proceedings.
- Subsidy limits: The assistance provided through the GGS is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy a borrower can receive within a three-year period, and borrowers will need to provide written confirmation that receipt of the GGS facility will not mean that the business exceeds this limit. All borrowers in receipt of a public subsidy should be provided with a written statement, confirming the amount and type of subsidy received.
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Please note: This article provides guidance for information purposes only. It should not be relied upon wholly when making or taking important business decisions – always seek the services of an appropriately qualified professional. The views expressed by websites referenced to are limited to those of the websites, and do not necessarily reflect the views of Markel Direct.