Launched in July 2024, the Growth Guarantee Scheme (GGS) is a new government-backed loan that replaces the Recovery Loan Scheme.
The scheme is intended to support smaller businesses, via accredited lenders, with finance to enable them to invest and grow.
Interest rates and fees vary, however, it is the intention that the scheme should improve the terms on offer to borrowers – if a lender is able to offer a commercial loan on better terms, they will do so.
The funding can be used for almost any business purpose, to fund equipment, investment, or better manage cash flow.
Available products include
- Term loans;
- Overdrafts;
- Asset finance;
- Invoice finance; and
- Asset-based lending.
Eligibility
To be eligible for the GGS, businesses should
- Have a turnover of less than £45 million (on a group basis, if part of a group);
- Have been trading in the UK for a minimum of 2 years and be generating more than 50% of its income from trading activity;
- Be a limited company; and
- Not be in difficulty, or have any collective insolvency proceedings ongoing.
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.
It should be noted that different rules apply to businesses based in Northern Ireland.
Key features
The GGS offers businesses
- Loans of up to £2 million per business group;
- Terms loans and asset finance facilities available from three months up to six years;
- Overdrafts, invoice finance, and asset-based lending available from three months up to three years; and
- A 70% government-backed guarantee against the outstanding balance of the facility, after it has completed its normal recovery process.
Personal guarantees can be taken at the lender’s discretion (Principal Private Residences cannot be taken as security within the scheme) and the borrower remains 100% liable for the debt.
Further details on the Growth Guarantee Scheme can be found here.
