Growth Guarantee Scheme UK: How It Works, Who Qualifies and How to Apply

What Is the Growth Guarantee Scheme?

The Growth Guarantee Scheme (GGS) is a UK government-backed lending programme launched on 1 July 2024. It is the direct successor to the Recovery Loan Scheme (RLS), which itself evolved from the COVID-19 emergency loan schemes. Unlike those emergency programmes, GGS is designed specifically to support business investment and growth rather than crisis recovery.

The British Business Bank administers the scheme on behalf of the Secretary of State for Business and Trade. The scheme does not lend money directly to businesses. Instead, it provides accredited lenders with a 70% government-backed guarantee against the outstanding balance of eligible facilities after those lenders have exhausted their normal recovery process. This reduces the lender's credit risk, enabling finance to reach viable businesses that might not meet standard commercial lending criteria.

GOV.UK published the official scheme listing on 29 June 2026, with the Department for Business and Trade confirming all current terms.

How the 70% Guarantee Works

The most commonly misunderstood aspect of the scheme is what the 70% guarantee actually means. It does not mean the government pays 70% of the loan. It does not reduce the amount the borrower must repay. It does not protect the borrower in any way.

The guarantee works as follows: if a business defaults on a GGS-backed facility and the lender has followed its standard recovery process, the lender can claim 70% of the outstanding balance from the government. The lender still bears 30% of the loss. The business remains 100% liable for the full amount borrowed at all times.

The practical effect for the borrower is that lenders are willing to approve facilities they might otherwise decline, and may offer more competitive terms because their net risk exposure is reduced. The guarantee is provided to the lender, not to the borrower.

Products Available Under GGS

The scheme supports five types of business finance. Not every accredited lender offers all five.

Eligibility: Who Can Apply

The eligibility criteria are set by the scheme rules and assessed by the accredited lender. All of the following must apply:

• UK trading: the business must carry out trading activity in the UK and, for most businesses, generate more than 50% of its turnover from trading activity (the sale of goods or services). Charities and further education colleges are exempt from this 50% rule
• Turnover cap: annual turnover must not exceed £45 million, measured at group level where the business is part of a group
• Viable business: the lender must consider the business to have a viable business proposition and sufficient cash flow to service the debt
• Not in difficulty: the business must not be a business in difficulty, which includes not being in relevant insolvency proceedings
• Subsidy compliance: borrowers must confirm in writing that receiving a GGS facility will not cause them to exceed the maximum subsidy they are permitted to receive over a rolling three-year period
• Business structure: GGS is open to limited companies, limited liability partnerships, sole traders, partnerships, community benefit societies, and charitable incorporated organisations among others. You cannot apply as an individual who is not a sole trader or partner

Who Is Not Eligible

The following entities are explicitly excluded from the scheme regardless of their turnover or viability:

• Banks, building societies, insurers and reinsurers - note that insurance brokers are eligible
• Public sector bodies
• State-funded primary and secondary schools
• Individuals who are not sole traders or partners in a partnership
• Businesses carrying out certain activities in mining and quarrying, including mining of coal and lignite, extraction of crude petroleum and natural gas, and certain support activities for petroleum and natural gas extraction

What GGS Finance Can Be Used For

The scheme is flexible on permitted use. Finance can be used for any legitimate business purpose, including:

• Business investment and expansion - new equipment, premises, vehicles, technology
• Working capital and cash flow management
• Research and development
• Hiring and workforce expansion
• Refinancing existing debt from a different lender (subject to lender approval)
• Commercial property purchase for owner-occupiers
• Debt consolidation to free up working capital

GGS cannot be used for personal expenditure. All use of funds must be for legitimate business purposes within the UK.

Pricing: Interest Rates and Fees

Interest rates and fees are not set by the scheme - they are set by each accredited lender based on the individual lending proposal, the borrower's credit profile, the type of facility, and the benefit of the government guarantee.

Lenders are required to pass on the benefit of the guarantee to borrowers. If a lender can offer a commercial facility on equivalent or better terms without the guarantee, it must do so - GGS should only be used where it genuinely improves terms for the borrower.

In practice, GGS-backed facilities may carry higher rates than standard commercial lending because lenders charge a fee to cover the guarantee cost passed to them by the British Business Bank. However, for businesses that would not qualify for standard commercial facilities, GGS can unlock access to institutional funding at more competitive rates than alternative finance.

Lenders can charge a one-off completion fee in addition to interest. All pricing must be disclosed clearly before the facility is agreed.

Personal Guarantees and Security

Two important rules on security apply across all GGS-backed facilities:

• Principal private residence: lenders cannot take a borrower's principal private residence (their home) as security for a GGS-backed facility. This is an absolute prohibition under the scheme rules
• Personal guarantees: lenders can still take personal guarantees from directors or shareholders at their discretion, in line with their normal commercial lending practices. A personal guarantee is not the same as taking a property as security

Previous Government Scheme Borrowers

Businesses that took out facilities under earlier government schemes are not automatically excluded from GGS. Specifically, borrowers who had CBILS, CLBILS, BBLS or RLS facilities before 30 June 2024 can still apply for GGS, subject to:

• Meeting the GGS eligibility criteria
• Meeting the accredited lender's own criteria
• The additional lending being considered affordable
• Subsidy limits not being exceeded - previous subsidies may reduce the maximum amount available under GGS

Scheme History and the Extension to 2030

The GGS launched on 1 July 2024 as the successor to Recovery Loan Scheme Phase 3. The original plan was for the scheme to run until 31 March 2026. In the 2025 Spending Review, the government extended GGS to 31 March 2030, giving businesses and lenders four additional years of certainty.

In April 2025, the Chancellor announced an additional £500 million of lending capacity specifically for GGS, bringing total available capacity higher. By mid-2026, the scheme had already deployed approximately £2.6 billion to over 16,000 businesses across the UK.

The British Business Bank's total financial capacity stands at £25.6 billion across all programmes.

How to Apply: Step by Step

There is no central application portal. Businesses apply directly through an accredited lender, or via a broker who places applications with accredited lenders. The scheme operates through delegated decision-making - the British Business Bank does not assess individual applications. Each accredited lender makes its own credit decisions.

1. Choose your product type first - term loan, asset finance, overdraft, invoice finance, or asset-based lending. Different lenders specialise in different products
2. Find an accredited lender - use the filter tool at british-business-bank.co.uk/finance-options/debt-finance/growth-guarantee-scheme/accredited-lenders to find lenders by region and product type
3. Prepare your documentation:
   • Latest filed accounts (or management accounts if recently incorporated)
   • Up-to-date management accounts and cashflow forecasts
   • Bank statements (typically last 3-6 months)
   • Business plan or use-of-funds note explaining what the finance is for and how it will be repaid
   • Details of any previous government subsidies received
   • Director details and proof of identity
   • Asset list if applying for secured lending
4. Submit the application - the lender carries out standard credit and fraud checks. If the lender can offer a facility on equivalent commercial terms without the guarantee, it will do so. If GGS is needed to make the facility viable, it will be applied
5. Receive the offer - if approved, you will receive a written offer with the facility terms, interest rate, fees, repayment schedule and personal guarantee requirements. Review all terms carefully
6. Confirm subsidy compliance - you must provide written confirmation that accepting the facility will not cause your business to exceed its subsidy limit

GGS vs Start Up Loans: Which Is Right?

GGS and Start Up Loans serve different stages of business. For early-stage businesses in their first three years of trading, the British Business Bank's Start Up Loans programme offers unsecured personal loans of £500 to £25,000 at a fixed interest rate of 6% per annum, with free mentoring included. The eligibility criteria, application process and pricing are materially different from GGS.

GGS is generally more appropriate for established SMEs seeking larger facilities for growth or investment. If a business is in its first few years and needs under £25,000, Start Up Loans is likely a simpler and cheaper route.

Fraud Warning

The British Business Bank has issued explicit warnings about fraudulent activity around the scheme. GGS is managed through accredited lenders only. No legitimate GGS facility will be offered through an unaccredited intermediary. Before proceeding with any GGS application, verify that the lender is on the official accredited lenders list at the British Business Bank website. If you are approached by an intermediary claiming to offer GGS-backed finance through an entity that is not on the accredited list, treat this as a potential scam.

What is the Growth Guarantee Scheme?

The Growth Guarantee Scheme (GGS) is a UK government-backed lending programme run by the British Business Bank. It provides accredited lenders with a 70% guarantee against outstanding facility balances, enabling finance for viable small and medium businesses that might not qualify for standard commercial lending. The scheme launched on 1 July 2024 and runs to 31 March 2030.

Does the 70% guarantee mean the government pays 70% of my loan?

No. The 70% guarantee is provided to the lender, not the borrower. If a business defaults and the lender completes its normal recovery process, the lender can claim 70% of the outstanding balance from the government. The borrower remains 100% liable for the full amount borrowed at all times.

How much can I borrow under the Growth Guarantee Scheme?

The maximum is £2 million per business group for businesses in Great Britain. For businesses in Northern Ireland under the Windsor Framework, the maximum is £1 million. Minimum amounts are £25,001 for term loans and overdrafts, and £1,000 for asset finance, invoice finance and asset-based lending.

Who is eligible for the Growth Guarantee Scheme?

UK businesses with annual turnover under £45 million that carry out trading activity in the UK, have a viable business proposition, are not in financial difficulty, and generate more than 50% of turnover from trading (with exemptions for charities and further education colleges). Banks, building societies, insurers, public sector bodies, state-funded schools and certain mining and extraction businesses are excluded.

Can I apply if I already had a CBILS, BBLS or Recovery Loan?

Yes, previous borrowers under COVID-era schemes can still apply for GGS, provided they meet the eligibility criteria and their lender considers additional borrowing affordable. However, previous subsidies may reduce the maximum amount available, and you must confirm your total subsidy remains within the permitted three-year rolling limit.

Can the lender take my home as security?

No. Under the GGS scheme rules, lenders are prohibited from taking a borrower's principal private residence as security for any GGS-backed facility. Lenders can still take personal guarantees from directors at their discretion.

When does the Growth Guarantee Scheme end?

The scheme runs until 31 March 2030, following an extension announced in the 2025 Spending Review. The original end date was 31 March 2026. All core terms including the 70% guarantee, facility types and eligibility criteria remain unchanged by the extension.

How do I apply for the Growth Guarantee Scheme?

You apply directly through an accredited lender, or through a broker who works with accredited lenders. There is no central application portal. Use the accredited lenders filter at british-business-bank.co.uk to find lenders by region and product type. You will need up-to-date accounts, management information, cashflow forecasts, a use-of-funds statement and details of any previous subsidies.