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Growth Guarantee Scheme
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Growth Guarantee Scheme for UK businesses
The Growth Guarantee Scheme (GGS) is a government-backed lending initiative designed to help UK businesses access the finance they need to grow. Available until 31st March 2030, the scheme supports borrowing from £10,000 up to £2 million, with a 70% government guarantee giving lenders the confidence to say yes, even to businesses that may not meet standard lending criteria.
At UK Business Finance, we work with a wide panel of lenders accredited under the scheme. Whether you need an unsecured business loan, invoice finance, or asset finance, we can help you find the right deal and guide you through the application from start to finish.
What is the Growth Guarantee Scheme?
The Growth Guarantee Scheme (GGS) is a successor to the Recovery Loan Scheme (RLS), which was introduced to support businesses during and after the COVID-19 pandemic. Like its predecessor, the GGS is backed by the UK government and administered through a network of accredited lenders, but it has been designed to look forward, supporting investment and growth rather than recovery.
The scheme opened to applications on 1st July 2024 and is available until 31st March 2030. It is aimed at small and medium-sized businesses with an annual turnover of up to £45 million, provided they can demonstrate a viable business proposition and are not currently in financial difficulty.
Under the GGS, the government guarantees up to 70% of the loan value. This does not mean you are exempt from repaying the debt, but it does mean lenders are more willing to offer competitive terms to businesses they might otherwise view as higher risk.
To be eligible, most businesses must generate more than 50% of their income through trading activity. The funding can be used for almost any genuine business purpose, from day-to-day working capital to longer-term investment.
Types of finance available under the Growth Guarantee Scheme
The Growth Guarantee Scheme supports a range of finance products, giving businesses the flexibility to choose the solution that best fits their needs:
Unsecured business loan: Borrow a lump sum without putting up business assets as security through unsecured lending. Approval is based on the creditworthiness of your business and its ability to service the debt. A practical option for businesses that want quick access to capital without leveraging their assets.
Invoice finance: Release the cash tied up in unpaid customer invoices before they are due. Available as invoice factoring (where the lender manages your sales ledger) or invoice discounting (where you retain control). Particularly useful for businesses with strong order books but inconsistent cash flow.
Hire purchase: Acquire business-critical equipment by spreading the cost over a fixed term through a hire purchase agreement. Unlike leasing, you take ownership of the asset at the end of the agreement, making it well-suited to businesses that need equipment for the long term.
Asset-based lending: Use the value of assets already on your balance sheet to secure borrowing. This can unlock significant capital for businesses with strong asset bases, even where traditional lending criteria might not be met.
Am I eligible for the Growth Guarantee Scheme?
To access finance through the Growth Guarantee Scheme, your business will need to meet a set of criteria set by the British Business Bank and the accredited lender you apply through. While individual lenders may have their own additional requirements, the core eligibility conditions are:
- Your business must be registered and trading in the UK
- Annual turnover must not exceed £45 million (assessed on a group basis where applicable)
- The business must have been trading for a minimum of two years
- More than 50% of your business income must come from trading activity
- The business must not be in financial difficulty or subject to relevant insolvency proceedings
- The borrowing must be for a genuine business purpose, for example working capital, investment, or trade support
Previous recipients of COVID-19 government-backed loans, including CBILS, Bounce Back Loans, and Recovery Loan Scheme facilities taken out before 30th June 2024, remain eligible to apply, provided all other criteria are met.
It is worth noting that certain business types are excluded from the scheme, including banks, insurance companies, state-funded schools, and public sector organisations. Sole traders and partnerships are eligible.
How much can I borrow under the Growth Guarantee Scheme?
The maximum borrowing limit under the Growth Guarantee Scheme is £2 million per business. The minimum and maximum amounts vary depending on the type of finance you are applying for:
- Business loans (secured or unsecured): £25,001 to £2 million
- Invoice finance and asset finance: £1,000 to £2 million
The amount a lender will offer will depend on your business's financial profile, including your turnover, trading history, and ability to service the debt. Lenders are not required to offer the maximum amount, as they will carry out their own assessment of affordability before making a decision.
Repayment terms for loans run from three months up to six years, giving businesses a degree of flexibility when structuring their repayments. For invoice finance and asset finance, terms will vary depending on the specific product and lender.
What can I use the Growth Guarantee Scheme for?
One of the key advantages of the Growth Guarantee Scheme is its flexibility. There are very few restrictions on what the funding can be used for, as long as it serves a legitimate business purpose. Common uses include:
Working capital: covering day-to-day operational costs during slower periods or periods of rapid growth
Business expansion: investing in new premises, markets, or product lines
Equipment and machinery: purchasing or upgrading assets needed to deliver your product or service
Stock and inventory: funding larger stock purchases to fulfil contracts or respond to demand
Payroll support: ensuring staff are paid on time during cash flow pressure
One-off costs: managing unexpected expenses such as tax bills, legal fees, or emergency repairs
Marketing investment: funding campaigns to build brand awareness, generate leads, or enter new markets
If you are unsure whether your intended use qualifies, our team can advise before you apply. In most cases, if the purpose is genuinely business-related, it will be covered.
How does the Growth Guarantee Scheme affect future borrowing?
Taking on finance through the Growth Guarantee Scheme is likely to form part of your overall credit profile going forward. Whether it has a positive or negative impact depends largely on how well the agreement is managed.
Businesses that keep up with repayments and manage the facility responsibly can benefit from a stronger credit history, which may improve their chances of securing further finance at competitive rates in the future. Lenders view consistent repayment behaviour as a positive indicator of financial reliability.
On the other hand, taking on more debt than your business can comfortably service may reduce your borrowing capacity with other lenders. Before committing, it is worth considering your current debt levels and whether additional repayments fit comfortably within your projected cash flow.
If you are uncertain about how GGS borrowing might interact with any existing finance agreements, we are happy to talk through your situation in detail before you proceed.
Can the Growth Guarantee Scheme be used for asset finance?
Yes, asset finance is one of the eligible product types under the Growth Guarantee Scheme. Businesses can access asset finance facilities of up to £2 million through the scheme, with a minimum facility size of £1,000.
This includes hire purchase agreements, where you spread the cost of an asset over a fixed period and take ownership at the end of the term. Finance leasing is also available, which may suit businesses that prefer not to own the asset outright.
Repayment terms for asset finance under the GGS run from a minimum of three months up to a maximum of six years. As with other facility types, the final terms will depend on the lender's assessment of your business and the nature of the asset being financed.
Whether you are looking to fund new equipment, vehicles, or specialist machinery, we can help you identify the most appropriate asset finance solution and connect you with the right lender.
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Finance Options Test
How do we work?
1. Get a customised quote
When you reach out to us, we will likely request that you provide the following information. Your latest set of accounts, previous 6 months’ banks statements and director’s personal details.
2. Compare options
Once the information from step 1 has been confirmed, we will reach out to our extensive panel of funders, who under normal circumstances, respond with an answer in 48 hours. After this, Know Your Customer (KYC) and identification checks will take place for the business and its directors.
3. Finalise the agreement
As soon as you agree to move forward with the terms and conditions, you will receive the relevant documents for you to sign and then return. After the final checks have been completed, the funds will be released. The time taken to release the funding varies depending on the funder, ranging from 24 to 72 hours.
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Growth Guarantee Scheme FAQs
Which types of organisation cannot apply for the Growth Guarantee Scheme?
The following are excluded from the scheme: banks and financial institutions, insurance companies, state-funded schools (primary and secondary), and public sector bodies. Individuals applying in a personal capacity are also ineligible, though sole traders and partners operating within a business structure can apply.
What types of finance are covered by the Growth Guarantee Scheme?
The scheme covers unsecured business loans, invoice finance, asset finance (including hire purchase and finance leasing), and asset-based lending. The right product for your business will depend on your specific circumstances, the purpose of the borrowing, and what your lender is able to offer.
Is it possible to use the Growth Guarantee Scheme to refinance existing debt?
Yes, refinancing existing debt is permitted under the scheme, subject to the lender's individual criteria. This can be a useful way to consolidate existing borrowing, extend repayment terms, or reduce your overall monthly commitments. If refinancing is something you are considering, speak to our team and we can explore whether the GGS is the right route for your situation.
Can the Growth Guarantee Scheme be used to finance used or second-hand assets?
In many cases, yes. The scheme can be used to finance used assets, though the specific terms will depend on the lender's policies and the type of asset involved. Factors such as the age and condition of the asset may influence eligibility, and the available repayment terms may differ from those for new assets. We can help you identify lenders that are comfortable with the asset you have in mind.
Can startup businesses apply for the Growth Guarantee Scheme?
The Growth Guarantee Scheme requires a minimum trading history of two years, which means early-stage startups are unlikely to qualify. If your business has been trading for less than two years, there may be other finance options better suited to your stage, including government-backed Start Up Loans. Get in touch and we can help identify the most appropriate route.
Can sole traders access the Growth Guarantee Scheme?
Yes, sole traders can apply, provided they meet the eligibility criteria, including a minimum of two years' trading history and the other conditions set by the scheme. As a sole trader, there is no legal distinction between personal and business finances, so lenders will typically assess your personal credit profile as part of the application.
How does the government guarantee work for lenders?
The government's 70% guarantee is provided to the lender, not the borrower. It means that if a business defaults on the loan, the government will cover up to 70% of the outstanding balance, reducing the lender's exposure. This gives lenders greater confidence to approve applications and offer more competitive terms than they might be able to under standard commercial lending criteria. As the borrower, you remain fully responsible for repaying the full amount borrowed.
