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The Growth Guarantee Scheme (GGS): Everything You Need To Know

The Recovery Loan Scheme, set to end in June 2024, will be extended and renamed the Growth Guarantee Scheme, maintaining its terms to ensure stability for lenders and businesses. Lenders will offer a 70% guarantee on finance up to £2 million for smaller businesses, aiming to support around 11,000 businesses from July 1, 2024, to March 31, 2026.

The first two phases, designed to aid UK businesses post-Covid-19, provided £4.3 billion in financing, and since August 2022, the third phase has disbursed over £1 billion, with 80% of facilities outside London and over 90% supporting businesses with fewer than 50 employees.

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How does the Growth Guarantee Scheme work?

Businesses can directly apply for lending under GGS through various accredited lenders or with the assistance of a broker like Approved Finance.

Our team can provide insights into whether applying for lending through the Growth Guarantee Scheme might enhance your chances of success. It's important to note that the scheme is designed to support businesses that may not meet a lender’s typical lending criteria.

Similar to the Recovery Loan Scheme, GGS offers a 70% guarantee on lending, ultimately backed by the government. This guarantee is extended to the lender, while businesses remain fully liable for the borrowed amount under the Government Guarantee Scheme.

GGS covers term loans, overdrafts, asset finance, and invoice financing.

When do businesses need to pay the money back?

Repayment terms vary based on the chosen financial product under the Growth Guarantee Scheme:

  • Up to six years for term loans and asset finance facilities (minimum three months)

  • Up to three years for overdrafts and invoice finance facilities (minimum three months)

When does the Growth Guarantee Scheme start and end?

The Growth Guarantee Scheme commences on July 1, 2024, and concludes on March 31, 2026.

Why has the government extended and renamed the Recovery Loan Scheme?

In February 2024, the government designated the year as "the year of the SME," announcing initiatives such as the Help to Grow campaign and a small business council. As part of these efforts, the government extended and rebranded the Recovery Loan Scheme, now running until March 2026 under the name Government Guarantee Scheme. This extension aims to enable an estimated 11,000 smaller businesses to access crucial financing.

How does the Growth Guarantee Scheme differ from the Recovery Loan Scheme?

The GGS is essentially an extension of the most recent iteration of the Recovery Loan Scheme, maintaining continuity with minor adjustments, according to the British Business Bank.

How much can I borrow under the Growth Guarantee Scheme?

Businesses can borrow up to a maximum of £2 million per business across all types of borrowing, including term loans, overdrafts, invoice finance, and asset finance.

Which businesses are eligible for the Growth Guarantee Scheme and what are the eligibility criteria?

Eligible entities under GGS include sole traders, limited partnerships, limited liability partnerships, corporations, co-operatives, community benefit societies, and other legal entities conducting business in the UK through a business account.

To qualify, businesses must:

  • Have a turnover of less than £45 million

  • Have been actively trading in the UK for at least two years

  • Generate more than 50% of turnover from UK trading activities (unless applying as a registered charity or further education establishment)

  • Demonstrate viability of the business proposition

  • Not be undergoing collective insolvency proceedings or other financial distress

  • Intend to use the loan for business purposes

Which businesses aren't eligible for the Growth Guarantee Scheme?

Ineligible entities include banks, insurance companies, state-funded schools, public sector bodies, and individuals (excluding sole traders or partners acting on behalf of a partnership).

Can sole traders access the Government Guarantee Scheme?

Yes, sole traders can apply for the Government Guarantee Scheme, provided they meet other eligibility criteria.

Can businesses apply for the Growth Guarantee Scheme if they previously borrowed under the Recovery Loan Scheme?

Details on whether businesses can borrow under both schemes concurrently are yet to be confirmed.

What are the interest rates?

Interest rates offered depend on the lender and the business's circumstances, capped at an annual effective rate of interest and upfront fees not exceeding 14.99%, as specified by the British Business Bank.

What is the government guarantee?

Under the Government Guarantee Scheme, if a business defaults on its loan, the lender can recover 70% of the outstanding loan value from the government. However, businesses remain fully liable for the debt.

What can the funds be used for?

Funds obtained under the Government Guarantee Scheme can be utilised for various business purposes, such as managing cash flow, purchasing equipment, meeting one-off expenses, covering payroll, investing in marketing, or expanding operations.

Can businesses apply for the Growth Guarantee Scheme if they previously had a Bounce Back Loan or borrowed under CBILS or CLBILS?

Yes, businesses can apply for finance under the Government Guarantee Scheme even if they previously borrowed under BBLS, CBILS, or CLBILS.

Can businesses with bad credit apply?

Businesses with adverse credit histories may still apply for GGS, although their options may be more limited and interest rates potentially higher. Each application is assessed individually by lenders.

How much has been borrowed under the Recovery Loan Scheme, the Growth Guarantee Scheme's predecessor?

The first two phases of the Recovery Loan Scheme provided £4.3 billion in financing to support UK businesses in their recovery from the Covid-19 pandemic. The current third phase, launched in August 2022, has already disbursed over £1 billion in finance.

Will I need a credit check to apply?

Yes, lenders will conduct credit and possibly fraud checks as part of the application process. Businesses previously declined for credit may still be eligible under the Government Guarantee Scheme.

Tips for applying for the Growth Guarantee Scheme

  • Clearly define the purpose of the loan in your business plan.

  • Prepare necessary documentation, including management accounts, financial statements, and asset information.

  • Consider applying through Approved Finance for guidance and to streamline the process.

Mistakes to avoid when applying

  • Ensure the financing aligns with your cash flow needs.

  • Borrow responsibly and realistically assess repayment capabilities.

  • Choose the right lender and financing type to avoid unnecessary delays.

How do I apply?

Applications for the Growth Guarantee Scheme (GGS) are now open! Please click the link below and check your eligibility today:

If you have any urgent questions and would like to speak to a member of our finance team, feel free to call on 01908 429888 or email us via


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