What is the Growth Guarantee Scheme (GGS)?

The Growth Guarantee Scheme (GGS) is a government-backed lending scheme open to small businesses in the UK. It can be seen as the successor of the now closed Recovery Loans Scheme and operates on very similar terms to its predecessor. Applications for the GGS opened on 1st July 2024 will remain open until 31 March 2026.

Understanding the Growth Guarantee Scheme

The aim of the Growth Guarantee Scheme is to improve the terms available to businesses looking to  access funds to improve their cash flow, invest in their future, or embark on a growth or expansion project.

Under the GGS, businesses outside the scope of the Northern Ireland Protocol can borrow up to £2m, however, they must be able to demonstrate their ability to service this level of borrowing. The government will provide a guarantee covering up to 70% of the value of the borrowing taken out; this provides a huge level of security to the lender which increases their appetite to lend to businesses they may otherwise not be able to help under their standard lending criteria.

What type of borrowing can a company take out under the Growth Guarantee Scheme?

As with the Recovery Loans Scheme, borrowing under the Growth Guarantee Scheme can be in the form of a loan, invoice finance, asset finance, or an overdraft, allowing businesses to access funding in a way that works for them.

While the GGS does offer desirable terms for both lender and borrower alike, if  a lender can offer better terms on a finance deal which is outside of the GGS then they will do so.

Companies who previously accessed borrowing through a Bounce Back Loan (BBL), the Coronavirus Business interruptions Loans Scheme (CBILS) or the Recovery Loans Scheme (RLS) are still eligible to borrow funds through the GGS although the remaining balance on these existing loans will be taken into account when determining how much they are able to take access via the GGS.

What businesses are eligible for borrowing under the Growth Guarantee Scheme?

Businesses looking to access funds through the GGS must first meet the following eligibility criteria:

• Maximum turnover: Businesses must have a turnover less than £45m. When operating as part of a Group, this amount encompasses the turnover of the Group as a whole
• Be UK-based: The company must be trading in the UK and generating more than 50% of its income from business done within the UK
• Be viable: The company must be determined to be viable as an ongoing business entity
• Not be in difficulty: The borrowing company must not be in difficulty. This includes not being in collective insolvency proceedings
• Not exceed subsidy limits: Borrowing taken out through the GGS is classed as a subsidy. Borrowers must confirm that funds obtained through the GGS will not exceed the total amount of subsidy a company can receive

Lenders will also conduct their own credit and fraud checks and may ask you to provide certain documents, such as copies of the company’s accounts, to determine eligibility for the requested borrowing.

To learn more about the Growth Guarantee Scheme and see whether your company could benefit, contact the experts of UK Business Finance for a free no-obligation consultation.