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A common issue we hear from owner-managed businesses is that securing funding can be challenging, particularly for smaller businesses seeking under £1m. Understanding the Growth Guarantee Scheme: New Funding Opportunities for UK Small Businesses is crucial to overcoming these challenges. Funding requirements may be viewed as too small, or the business may still be in the early stages of trading.
However, viable options do exist, including one that may not yet be widely acknowledged or considered among small businesses looking for growth finance.
On 13 April 2025, the Chancellor announced that the Growth Guarantee Scheme (GGS) will provide approximately £500m of additional lending capacity to support more small businesses across the UK. This additional funding is targeted at businesses that may need help with cashflow. Understanding the Growth Guarantee Scheme: New Funding Opportunities for UK Small Businesses is essential for businesses seeking to improve their cashflow management.
Businesses can use GGS finance for any legitimate business purpose, including managing cashflow or working capital pressures arising from global tariff changes. However, they must also be able to afford the additional debt they take on.
The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme, designed to support access to finance for UK smaller businesses as they invest and grow. This scheme offers new funding opportunities for UK small businesses, particularly those that need a wide range of financial products offered by participating lenders, including term loans, overdrafts, asset finance, invoice finance and asset-based lending.
The scheme can generally support facilities of up to £2m, and provides lenders with a 70% government-backed guarantee.
Key Features of the Scheme
The Growth Guarantee Scheme aims to improve the terms offered to borrowers. Understanding the Growth Guarantee Scheme: New Funding Opportunities for UK Small Businesses will help you benefit from these improved terms. If a lender can offer a commercial loan on better terms, they will do so.
Key features include:
- Up to £2m per business group: The maximum facility amount under the scheme is generally £2m per business group. Minimum facility sizes vary, starting at £1,000 for asset finance, invoice finance and asset-based lending, and £25,001 for term loans and overdrafts.
- Flexible term lengths:
- Term loans and asset finance: 3 months to 6 years
- Overdrafts, invoice finance and asset-based lending: 3 months to 3 years
- Access to multiple schemes: Businesses that previously took out CBILS, CLBILS, BBLS or RLS facilities before 30 June 2024 are not prevented from accessing GGS. However, existing borrowing under those schemes may reduce the maximum available under GGS.
- Pricing: Interest rates and fees vary by lender and depend on the lending proposal. Pricing reflects both the Government guarantee and a fee charged to the lender for that guarantee.
- Personal Guarantees: Lenders may take personal guarantees in line with their standard practices; however, Principal Private Residences cannot be taken as security.
- Guarantee to the lender: The scheme provides a 70% government-backed guarantee to the lender on the outstanding balance after recovery processes. Borrowers remain 100% liable for the debt.
- Lender-led decisions: All GGS-backed facilities are offered at the discretion of the lender, who will conduct standard credit and fraud checks.
Eligibility Criteria
To qualify for the Growth Guarantee Scheme, businesses must meet the following criteria:
- Turnover: Up to £45m (on a group basis if applicable).
- UK-based trading: The business must carry out trading activity in the UK and, for most, generate more than 50% of its income from trading.
- Viability test: The lender must assess the business as having a viable proposition.
- Not a business in difficulty: The business must not be in insolvency proceedings or otherwise classified as a business in difficulty.
- Subsidy limits: Borrowers must confirm in writing that receiving a GGS facility will not cause them to exceed permitted subsidy levels. Any business receiving public subsidies must receive a written statement confirming the level and type of aid received.
How We Can Help
Whatever your funding needs- and regardless of the stage your business is at – our Corporate Finance team is here to support you. We can assist with business plans, financial modelling, debt restructuring and general advisory services.
If you are an owner-managed business seeking guidance, please do get in touch.
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Last Updated on 25 November 2025
