Growth Guarantee Scheme

Nicholls & Roe Are Commercial Finance Specialists

Key The Growth Guarantee Scheme (GGS) succeeds the Recovery Loan Scheme and aims to support UK smaller businesses in accessing finance for investment and growth. It launched on 1 July 2024 with accredited lenders offering a range of products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending.

Key Details of the Growth Guarantee Scheme

  • Facility Sizes: The GGS can support facility sizes of up to £2 million, with a 70% government-backed guarantee provided to lenders. For borrowers outside the scope of the Northern Ireland Protocol, the facility size can be up to £2 million. Borrowers within the scope of the Northern Ireland Protocol may borrow up to £1 million, subject to sector-specific aid limits.
  • Use of Finance: Businesses can use the finance for any legitimate business purpose, such as managing cash flow and making investments, provided they can afford the additional debt.
  • Administration: The British Business Bank administers the scheme on behalf of the Secretary of State for Business and Trade.

Key Features of the Scheme

  • Maximum Amount: Up to £2 million per business group for those outside the Northern Ireland Protocol, and up to £1 million for those within it. Minimum facility sizes start at £1,000 for asset finance, invoice finance, and asset-based lending, and £25,001 for term loans and overdrafts.
  • Product Range: The GGS supports term loans, overdrafts, asset finance, invoice finance, and asset-based lending facilities. Not all lenders will offer all products.
  • Term Length: Term loans and asset finance facilities range from three months to six years. Overdrafts, invoice finance, and asset-based lending are available from three months to three years.
  • Multiple Schemes Access: Businesses with previous loans from CBILS, CLBILS, BBLS, or RLS can still access GGS, although prior borrowing may affect eligibility.
  • Pricing: Interest rates and fees will vary based on the lender’s specific proposal and will consider the government guarantee.
  • Personal Guarantees: These can be taken at the lender’s discretion, but Principal Private Residences cannot be used as security.
  • Lender Guarantee: The scheme provides lenders with a 70% government-backed guarantee against the outstanding balance after normal recovery processes. Borrowers remain 100% liable for the debt.

Subsidy Information

Assistance through GGS is considered a subsidy and benefits the borrower. There is a limit to the amount of subsidy a borrower and its wider group can receive over any rolling three-year period, and previous subsidies may reduce the borrowing limit.

Eligibility Criteria

  • Turnover Limit: Open to smaller businesses with a turnover of up to £45 million.
  • UK-Based: The borrower must be trading in the UK, with most businesses required to generate more than 50% of their income from trading activity.
  • Viability Test: The borrower must have a viable business proposition.
  • Business in Difficulty: The borrower must not be in difficulty or insolvency proceedings.
  • Subsidy Limits: Borrowers must confirm that receiving the GGS facility will not exceed their allowable subsidy limit.

For more information, please contact us
info@nichollsandroe.co.uk

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