Bank launches Growth Guarantee Scheme to help smaller businesses in Scotland

09/07/2024
Reinald De Monchy (British Business Bank)

BRITISH Business Bank has launched its Growth Guarantee Scheme to help smaller businesses in Scotland access the finance they need to invest and grow

Further details of the Growth Guarantee Scheme, the successor to the Recovery Loan Scheme, have been published today.

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 British Business Bank has so far accredited 41 lenders for the Growth Guarantee Scheme. Following their accreditation, each lender needs to put in place the operations required to start lending under the 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 are going through the accreditation process and 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.

Scheme features

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.

Growth Guarantee Scheme terms include:

  • Up to £2m per business groupThe minimum and maximum amount of the facility varies according to the business’s circumstances and the type of facility. Maximum facility sizes are up to £2m per businessMinimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending, and £25,001 for term loans and overdrafts
  • Wide range of products: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 length: 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
  • Access to multiple schemes: 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 borrowing under these schemes may reduce the maximum amount the borrower is eligible for
  • Pricing: Interest rates and fees charged by lenders will vary and will depend on the specific lending proposal. The lender’s pricing will take into account the benefit of the Government guarantee
  • Personal Guarantees: 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
  • Guarantee is to the lender: The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt
  • Decision-making delegated to the lender: Growth Guarantee Scheme-backed facilities are provided at the discretion of the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants. 

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.”

How to access the Growth Guarantee Scheme

Further information on the Growth Guarantee Scheme, including the current list of accredited lenders, is available on the British Business Bank website.

The Growth Guarantee Scheme provides the lender with a 70% government-backed guarantee and the borrower always remains 100% 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.

Any new lenders who wish to apply for accreditation under the scheme can do so from today.

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