British Business Bank launches Growth Guarantee Scheme to help smaller businesses access finance
The British Business Bank, a government-owned economic bank specialising in helping UK businesses access financial support, has launched a new Growth Guarantee Scheme designed to support access to finance for UK smaller businesses as they look to invest and grow.
It is expected to support around 11,000 smaller businesses between 1 July 2024 and 31 March 2026.
The Growth Guarantee Scheme provides the lender with a 70 per cent government-backed guarantee and the borrower always remains 100 per cent liable for the debt. The British Business Bank will administer the Growth Guarantee Scheme on behalf of the Secretary of State for Business and Trade.
The British Business Bank has so far accredited 41 lenders for the Growth Guarantee Scheme and they will be listed on the British Business Bank website once they are ready to start receiving applications.
20 lenders have so far confirmed they are open for applications. Further lenders will be accredited over the coming weeks.
These lenders will provide a wide range of finance types to smaller businesses, including term loans, overdrafts, asset finance, invoice finance and asset-based lending.
The terms of the scheme are intended to remain broadly unchanged from its predecessor, the Recovery Loan Scheme, enabling continuity and consistency for lenders and the business community.
Reinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank, said: “We’re excited to launch the Growth Guarantee Scheme, which will allow lenders to offer more finance to their customers. This will help to generate more sustainable growth across the UK and provide a springboard to many smaller businesses to scale up or stay ahead.”
Growth Guarantee Scheme terms include:
- Up to £2 million per business group: Minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending, and £25,001 for term loans and overdrafts
- 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 loans and asset finance facilities are available from three months up to six years, with overdrafts, invoice finance and asset-based lending available from three months up to three years
- Businesses that took out a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) or a Recovery Loan Scheme (RLS) facility before 30 June 2024 are not prevented from accessing the Growth Guarantee Scheme, but
- Interest rates and fees charged by lenders will vary and depend on the specific lending proposal. The lender’s pricing will take into account the benefit of the Government guarantee
- Personal guarantees can be taken at the lender’s discretion, in line with their normal commercial lending practices. Principal Private Residences cannot be taken as security within the scheme
- The scheme provides the lender with a 70 per cent government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100 per cent liable for the debt.
