British Business Bank launches Growth Guarantee scheme to help small businesses access the finance they need to invest and grow

Further details on the Growth Guarantee Scheme, the successor to the Recovery Loan Scheme, are being published today.

The Growth Guarantee Scheme is designed to support access to finance for small UK businesses looking to invest and grow and is expected to support around 11,000 small businesses between 1 July 2024 and 31 March 2026.

THE British Commercial Bank has so far accredited 41 lenders for the Growth Guarantee Scheme. Once accredited, each lender must put in place the required operations to start lending under the scheme and will be listed on the British Business Bank website once they are ready to start taking applications. So far, 20 backers have confirmed they are open to applications. Additional backers are going through the accreditation process and will be accredited in the coming weeks.

These lenders will provide a wide range of financing types to small businesses, including term loans, overdrafts, asset financing, invoice financing, and asset-based lending.

Schema Features

The terms of the programme are expected to remain largely unchanged from its predecessor, the Recovery Loan Scheme, allowing for continuity and consistency for lenders and the business community.

The terms of the Growth Guarantee Program include:

• Up to £2M for corporate group: The minimum and maximum structure amount varies depending on the circumstances of the company and the type of structure. The maximum structure size is up to £2m per company. Minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending and £25,001 for term loans and overdrafts.
• Wide range of products: The Growth Guarantee Scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products
• Term duration:Term loans and asset finance lines are available from three months up to six years, with overdrafts, invoice financing and asset-based loans available from three months up to three years.
• Access to multiple schemas:Businesses that entered into a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS), or Recovery Loan Scheme (RLS) before June 30, 2024 are not excluded from accessing the Growth Guarantee Scheme, but borrowing under these schemes may reduce the maximum amount for which the borrower is eligible.
• Prices:Interest rates and fees charged by lenders will vary and depend on the specific loan proposal. The lender’s price will take into account the benefit of the government guarantee
• Personal guarantees:Personal guarantees may be taken at the discretion of the lender, in line with its normal commercial lending practices. Principal private residences cannot be taken as collateral under the scheme
• The guarantee is addressed to the lender:The program provides the lender with a 70% government guarantee on the outstanding balance of the credit line after it has completed its normal collection process. The borrower always remains 100% liable for the debt
• Decision delegated to the lender:Facilities supported by the Growth Guarantee Scheme are provided at the discretion of the lender. Lenders are required to carry out their standard credit and fraud checks for all applicants.

Reinald de Monchy, Managing Director, Wholesale Guarantee and Solutions, British Business Bank, She said: “We are excited to launch the Growth Guarantee Scheme, which will enable lenders to offer more finance to their customers. This will help generate more sustainable growth across the UK and provide a springboard for many small businesses to grow or stay ahead.”

How to access the Growth Guarantee Program

Further information on the Growth Guarantee Scheme, including the current list of accredited lenders, is available on the British Business Bank website website.

The Growth Guarantee Scheme provides the lender with a 70% government guarantee and the borrower remains 100% liable for the debt at all times. The British Business Bank will administer the Growth Guarantee Scheme on behalf of the Secretary of State for Business and Trade.

All new lenders wishing to apply for accreditation under the program can do so today.

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