Growth Guarantee Scheme (GGS)

 The Growth Guarantee Scheme (GGS) is the next step in providing financial support to UK small and medium-sized enterprises (SMEs), following the Recovery Loan Scheme. Launched on July 1, 2024, the scheme helps businesses secure funding to grow and invest through accredited lenders offering a variety of financial products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending.

Eligible businesses can typically borrow up to £2 million under the scheme, with a 70% government guarantee offered to lenders. However, for businesses under the Northern Ireland Protocol, borrowing limits are capped at £1 million unless a lower cap applies to sectors such as agriculture or fisheries. Funds can be used for legitimate business purposes, including managing cash flow or financing investments, provided the business can support the additional debt.

The scheme is administered by the British Business Bank on behalf of the Secretary of State for Business and Trade, with decision-making on loan applications delegated to lenders. If a commercial loan with better terms is available, lenders will offer that option instead.

•  Facility Limits: Businesses can access up to £2 million in financing. For those under the Northern Ireland Protocol, the cap is £1 million. Minimum loan amounts vary depending on the product type.
• Product Variety: The scheme supports a range of financing options, including term loans, overdrafts, asset finance, and invoice finance. Not all lenders will offer every product.
• Loan Terms: Term loans and asset finance facilities can last between three months and six years, while overdrafts and invoice finance options are available for up to three years.
• Access to Other Schemes: Businesses that previously utilized CBILS, CLBILS, BBLS, or RLS loans may still be eligible for GGS financing, though previous borrowing may reduce the maximum available amount.
• Flexible Pricing: Interest rates and fees vary based on the lender’s proposal. Lenders factor in the government guarantee and related fees in their pricing.
• Personal Guarantees: Lenders may require personal guarantees, though a business owner’s primary residence cannot be taken as security.
• Lender Guarantee: The 70% government guarantee applies to the lender, protecting them after completing their recovery process. Borrowers remain fully liable for the debt.
• Lender-Driven Decisions: Lenders handle all credit, fraud, and viability assessments as part of their normal procedures.

•  Turnover Cap: The scheme is available to businesses with a turnover of up to £45 million, assessed on a group basis where applicable.
• UK Operations: The business must operate in the UK and generate at least 50% of its revenue from trading activities.
• Viability: The business must present a sound financial case and meet the lender’s viability criteria.
• Not in Difficulty: Applicants must not be undergoing insolvency or other significant financial distress.
• Subsidy Compliance: Borrowers must confirm that receiving a GGS-backed facility will not exceed subsidy limits set for publicly funded support.