Growth Guarantee Scheme: how it works and who qualifies

The Growth Guarantee Scheme (GGS) is a government scheme that backs loans to smaller UK businesses. It gives accredited lenders a 70% government guarantee on facilities up to £2 million, which makes them more willing to lend. But here is the point most pages bury: the guarantee protects the lender, not you. If your business cannot repay, you still owe 100% of the debt.

The scheme replaced the Recovery Loan Scheme on 1 July 2024 and runs until 31 March 2030. It was expanded in July 2026 with longer loan terms, a bigger turnover cap and a lot more lending capacity. This guide covers how the guarantee really works, who qualifies, what it costs and how to apply.

What the Growth Guarantee Scheme is

The Growth Guarantee Scheme launched on 1 July 2024 as the successor to the Recovery Loan Scheme, and it runs until 31 March 2030.

Here is the basic deal. The government promises accredited lenders that it will guarantee 70% of each facility. If a borrower defaults, the lender can claim back most of its loss from the government. That safety net makes lenders more willing to say yes to businesses they might otherwise turn down.

The scheme covers four types of borrowing:

• Term loans, a lump sum repaid over a set period
• Overdrafts, a flexible borrowing limit on your business account
• Asset finance, borrowing to buy vehicles, machinery or equipment
• Invoice finance, an advance against money your customers owe you

You do not apply to the government. You apply to an accredited lender, and the guarantee sits in the background between that lender and the British Business Bank.

The 70% guarantee protects the lender, not you

This is the part people get wrong, so it is worth being blunt. You remain liable for 100% of the debt. The guarantee is a promise from the government to the lender, not to you.

If your business cannot repay, the lender chases you for the money in the normal way, just as it would with any other loan. The guarantee typically covers part of the lender's loss after it has tried to recover the debt. None of that reduces what you owe by a penny.

The same logic applies to personal guarantees. Lenders make their own decisions on security, and some ask you to sign a personal guarantee. The government's guarantee to the lender does not cancel or soften yours. If the business fails and you have signed one, the lender can pursue your personal assets.

Good for: viable businesses that keep getting turned down for ordinary borrowing. Watch out for: reading "government backed" as "government pays if it goes wrong". It does not work that way.

Who qualifies

The headline rules are simple:

• Your business is in the UK (the facility limits differ between Great Britain and Northern Ireland Protocol businesses, covered below)
• Turnover is up to £54 million a year (this cap was raised in July 2026, so some older pages still say £45 million)
• You borrow through a lender accredited by the British Business Bank

Beyond that, each accredited lender applies its own credit checks. The scheme does not force any lender to approve you. A lender still has to believe your business can afford the repayments, and it will typically want to see accounts, bank statements and a clear reason for borrowing, the same as with any business loan.

What you can get

Facilities go up to £2 million for businesses in Great Britain, and up to £1 million for businesses that fall under the Northern Ireland Protocol.

The 10-year maximum is new. Until July 2026, term loans and asset finance were capped at 6 years. A longer term brings the monthly repayment down, though borrowing for longer usually means paying more interest in total.

What it costs: a worked example

There is no single scheme interest rate. Each accredited lender sets its own rates and fees, so a Growth Guarantee Scheme loan is not automatically cheap. The guarantee helps you get a yes. It does not guarantee a good price.

From our directory, Funding Circle offers Growth Guarantee Scheme loans of £25,001 to £250,000 from 13.4% per year.

Here is roughly what that headline rate looks like on a real loan, assuming interest is charged monthly on the reducing balance, which is the usual way term loans work:

• Borrow £100,000 over 5 years at 13.4% per year
• Monthly repayment: roughly £2,300
• Total interest over the 5 years: around £38,000, before any fees

Two honest caveats. "From 13.4%" is the floor, and the rate you are actually offered depends on the lender's view of your business. Lenders also often charge arrangement or other fees on top, so the total cost matters more than the headline rate.

And remember the core mechanic: if the loan goes bad, that £100,000 is still your debt, all of it.

How to apply

You can only get a Growth Guarantee Scheme facility through an accredited lender. You cannot apply to the government directly.

• Check the accredited lender list. The British Business Bank publishes the full list on its website.
• Or go through a broker or marketplace. Swoop and Tide Funding Options are marketplaces that can match you with accredited lenders, which saves working through the list yourself.
• Apply as you would for any business loan. The lender runs its normal checks and handles the guarantee side with the British Business Bank. You never deal with the government directly.

Works if one lender turns you down, because nothing stops you applying to a different accredited lender instead.

What changed in July 2026

On 12 July 2026 the Chancellor announced an expansion of the scheme:

• An extra £6.5 billion of market lending capacity over four years, with annual capacity rising to £3.35 billion by 2028-29
• Around 20,000 businesses a year supported, up from around 8,000
• Maximum term for term loans and asset finance extended from 6 to 10 years, for facilities up to £1.1 million
• Turnover cap raised from £45 million to £54 million

In plain terms: more money in the pot, longer to repay it, and more businesses inside the turnover cap. If you looked at the scheme before mid 2026 and did not fit, the newer rules may change that.

Common questions

Facts checked on 7 September 2026. Information, not advice: check terms with the lender or scheme and speak to an accountant or FCA-authorised broker if unsure.