The British Business Bank reports that its Growth Guarantee Scheme has now supported more than £250 million of finance to smaller firms. The plan is the successor to the Recovery Loan Scheme.
The program provides access to various products like term loans, asset financing, and more, providing government-backed guarantees for lenders. The Growth Guarantee Scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the loan. Approximately 50 lenders have been accredited to offer financing to UK firms.
According to the Bank:
- The wholesale and retail sector received the highest proportion of facilities, at 17% of the total. This was followed by manufacturing, at 15% of facilities, while construction and professional and scientific accounted for 12% and 9%, respectively.
- 96% of facilities have been provided to businesses with fewer than 50 employees, with this finance used for expansion and growth, including asset finance, capital expenditure, start up and working capital.
- A quarter of the total lending from the Growth Guarantee Scheme has been provided under Asset Finance. This reflects the growth of Asset Finance as a finance option for businesses, seen in the wider marketplace over the last few years.
Reinald de Monchy, co-Chief of the Banking Officer for Products, British Business Bank, calls the progress of the Growth Guarantee Scheme a fantastic achievement for for such a short amount of time.
“Since its launch, we wanted to maintain the momentum we generated with the previous scheme and offer a diverse range of finance types across the UK. We hope to continue this into 2025 and support more smaller businesses as the scheme accredits more delivery partners.”
The Growth Guarantee Scheme is predicted to support approximately 11,000 smaller firms from July 2024 to March 2026.
The Growth Guarantee Scheme is designed to support access to finance for UK smaller businesses as they look to invest and grow and 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% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery processes. The borrower always remains 100% liable for the debt. The British Business Bank administers the Growth Guarantee Scheme on behalf of the Secretary of State for Business and Trade.
