Growth Guarantee Scheme explained: what UK SMEs need to know
How the government-backed Growth Guarantee Scheme works, what it does and does not change for borrowers, and how it compares with other UK business finance.
What the Growth Guarantee Scheme is
The Growth Guarantee Scheme (GGS) is a government-backed scheme managed by the British Business Bank. It replaced the Recovery Loan Scheme and is designed to support lending to smaller UK businesses.
Finance under the scheme is provided by accredited lenders, not by the government. The British Business Bank publishes the current list of accredited lenders and the scheme's latest terms, which can change, so always check its website before applying.
How the guarantee works
The government provides a partial guarantee to the lender, not to the borrower. If a facility defaults, the lender can claim part of its loss under the guarantee.
The business remains fully liable for the whole debt. The guarantee can make a lender more willing to lend, but it does not reduce what the business owes or remove the need to repay.
What kinds of finance can be covered
The scheme can support several facility types, including term loans, overdrafts, asset finance and invoice finance, depending on what each accredited lender offers through it.
Facility limits, terms and pricing are set by the lender within the scheme rules. Not every lender offers every product under GGS.
Who may be eligible
The scheme is aimed at UK-based trading businesses below a turnover threshold set in the scheme rules. Businesses must be viable and the lender must consider the borrowing affordable.
Some sectors and business types are excluded. Lenders still run their normal credit, affordability and know-your-customer checks, so the scheme is not a route around a weak application.
Personal guarantees and security
Lenders may still ask for security or personal guarantees under the scheme, subject to its rules. Read any guarantee carefully and take independent advice before signing.
Growth Guarantee Scheme or another option?
A scheme-backed loan can suit businesses that a lender would consider on the edge of its usual appetite. The process runs through accredited lenders and can involve the same documentation as a standard loan.
Where card takings or monthly revenue are strong, a merchant cash advance or revenue based financing may be worth comparing, as repayments follow sales rather than a fixed schedule. Compare total cost, repayment shape and any guarantees side by side.
Frequently asked
Is the Growth Guarantee Scheme a government loan?
No. Accredited lenders provide the finance. The government guarantees part of the lender's exposure, and the business remains liable for the full amount.
Does GD Capital offer Growth Guarantee Scheme loans?
Check the British Business Bank's list of accredited lenders for scheme-backed finance. GD Capital can help you compare non-scheme options such as business loans, merchant cash advance and revenue based financing.
Can I get a scheme-backed loan with bad credit?
Lenders still assess credit history, viability and affordability. Adverse credit can make approval harder, though each lender applies its own criteria.
Where can I find the current scheme terms?
The British Business Bank publishes the latest scheme details, eligibility rules and accredited lenders on its website. Terms can change, so check there before applying.
