The Growth Guarantee Scheme (GGS) is a UK government-backed lending programme that gives accredited lenders a 70% guarantee on business finance facilities of up to £2 million. It’s run by the British Business Bank, covers everything from term loans to asset finance, and is open to businesses with a turnover of up to £45 million. The borrower remains fully liable for the debt. The guarantee sits with the lender, not you.
Despite supporting nearly £3 billion in lending since July 2024, awareness among business owners is still surprisingly low. Many confuse the scheme with the old Bounce Back Loans. Others assume it’s a government grant. It’s neither. But for businesses that qualify, the GGS can improve the rates and terms you’re offered on a loan you were going to take out anyway.
This guide covers how the scheme works, who’s eligible, what types of finance are available, and what to expect when you apply.
How does the Growth Guarantee Scheme work?
When you apply for business finance through a GGS-accredited lender, the process looks almost identical to any other commercial loan application. You submit your financials, the lender assesses your business, and they make a decision based on their usual criteria.
The difference is what’s happening on the lender’s side. The government, through the British Business Bank, guarantees 70% of the outstanding balance if the borrower defaults. That guarantee gives lenders more confidence to approve applications they might otherwise decline, or to offer better rates than they would without the government-backed guarantee in place.
The guarantee protects the lender, not you. As the borrower, you’re still 100% responsible for repaying the full amount. If you default, the lender will pursue recovery from you first, using their normal process. The government guarantee only kicks in after that, covering 70% of whatever the lender couldn’t recover. You don’t get a discounted loan. You don’t get partial forgiveness. You get a better chance of being approved, and potentially better terms, because the lender is carrying less risk.
For example: Say you run a construction firm and need £250,000 to purchase equipment. You approach a lender, and on a standard commercial basis, they’re not comfortable with the exposure. Maybe your trading history is short, or your sector makes them cautious.
Under the Growth Guarantee Scheme, that same lender knows the government covers 70% of their downside if things go wrong. That might be enough to turn a no into a yes, or to bring the interest rate down from, say, 12% to 9%. You still owe £250,000 either way. But the terms you’re offered could look very different.
That’s the real value of the scheme. It doesn’t change what you owe. It changes what lenders are willing to offer you.
- Note: Lenders are required to offer you a standard commercial facility if they can match or beat the GGS-backed terms without the guarantee. So if your business is strong enough to get a good deal on its own, you’ll get that deal. The GGS exists for the gap between “good business, but the numbers make us nervous” and an outright no.
Who’s eligible for the Growth Guarantee Scheme?
The core criteria are straightforward. Your business needs to:
- Have a turnover of up to £45 million (on a group basis, if part of a group)
- Be carrying out trading activity in the UK
- Generate more than 50% of its income from trading (charities and further education colleges are exempt from this)
- Have a viable business proposition in the lender’s view
- Not be classed as a “business in difficulty”
- Not exceed government subsidy limits
The £45 million turnover ceiling is higher than most people expect. This isn’t a scheme limited to sole traders and micro-enterprises. Businesses turning over £10 million, £20 million, even £40 million still qualify.
If you’ve previously borrowed under the Bounce Back Loan Scheme, CBILS, CLBILS, or the Recovery Loan Scheme, you can still apply. But your previous borrowing may reduce the maximum amount available to you under the GGS.
What does “viable business proposition” mean?
There’s no universal definition. Each lender makes this call based on their own credit criteria. One lender might decline you while another approves you for the same amount. This is why getting turned down once doesn’t mean the scheme isn’t available to you.
The British Business Bank accredits over 70 lenders under the GGS, and their risk appetites vary significantly. If your first application doesn’t go through, we recommend working with a business finance broker like Greenwood Capital who can match you with lenders more likely to say yes.
What does “business in difficulty” mean?
You’ll be considered a business in difficulty if you’re in formal insolvency proceedings: administration, liquidation, a company voluntary arrangement, or an individual voluntary arrangement. Receiverships and restructuring plans under Part 26A of the Companies Act don’t count. If your business is struggling but hasn’t entered a formal process, you may still be eligible.
The subsidy limit that most overlook
The GGS counts as a government subsidy. Not the loan itself, but the benefit you receive from the guarantee. The exact calculation is technical, but broadly it reflects the financial advantage the guarantee provides to you as the borrower.
There’s a cap on total subsidy any business can receive over a rolling three-year period. If you’ve received other government-backed support (grants, previous guaranteed loans, other subsidised programmes), that eats into your allowance. Most small businesses won’t come close to the limit, but if you’ve stacked multiple schemes recently, check before you apply. Your lender will ask you to confirm this during the application.
What can you use the Growth Guarantee Scheme for?
The short answer is any legitimate business purpose. The British Business Bank doesn’t restrict how the funds are used. Working capital, equipment, expansion, hiring, refinancing existing debt, bridging a cashflow gap while you wait on a large invoice. It’s broad by design.
What shapes the detail is the type of finance you apply for. The GGS supports five products, though not every lender offers all of them.
Term loans
A fixed lump sum repaid over an agreed period, typically between three months and six years under the GGS. This is the most common route for businesses that need a specific amount for a defined purpose: buying equipment, funding a fit-out, hiring ahead of a busy period, or consolidating more expensive debt.
Minimum facility size is £25,001. Maximum is £2 million per business group. Interest rates vary between lenders and will depend on your business profile, the amount, and the term length.
Because the GGS reduces the lender’s risk, Growth Guarantee Scheme interest rates can come in lower than a standard commercial loan for the same borrower. How much lower depends on the lender and your circumstances, but the scheme’s terms require that the benefit of the guarantee is passed on to you rather than absorbed by the lender.
Our business loan calculator can help you estimate repayments at different rates.
Asset finance
If the funding is for a specific asset (vehicles, machinery, equipment), asset finance lets you spread the cost over time while the asset itself serves as security. Under the GGS, the minimum facility is £1,000 and terms can run up to six years.
This is popular in construction, manufacturing, transport, and logistics. The GGS guarantee can make the difference for businesses that are viable but don’t have the balance sheet history some lenders want to see before financing a large asset.
Invoice finance
If your cashflow problem is timing rather than revenue, invoice finance releases money tied up in unpaid customer invoices. A provider advances up to 90% of the invoice value upfront, then collects from your customer on normal terms. Under the GGS, invoice finance facilities start from £1,000 with terms of up to three years.
This works well for businesses in recruitment, professional services, or any sector where you’re regularly waiting 30, 60, or 90 days for payment while covering costs now.
Overdrafts
A flexible facility attached to your business bank account. You draw what you need, repay when funds come in, and only pay interest on what you’ve used. Under the GGS, business overdrafts are available from £25,001 with terms up to three years.
Overdrafts suit businesses that experience regular cashflow fluctuation rather than a one-off funding need. Seasonal businesses are a good example. The downside is that they’re repayable on demand and can be reviewed or reduced at short notice, so they’re not a substitute for longer-term finance.
Asset-based lending
This is a broader facility secured against a combination of your business assets: stock, equipment, property, receivables. It’s typically used by larger SMEs that need a more flexible funding structure than a single product can offer. Minimum facility is £1,000 under the GGS, with terms up to three years.
How to apply for the Growth Guarantee Scheme
Most people think there’s a separate GGS application – there isn’t. You don’t go to the British Business Bank’s website and fill in a form. You apply for business finance with an accredited lender in the normal way, and the lender decides whether to use the Growth Guarantee Scheme to back your facility. In practice, that means the process looks like this.
You choose an accredited lender, or work with a broker who can match you with one. You apply for the type of finance you need. The lender runs their standard credit and fraud checks, reviews your financials, and assesses your business. If they can offer you a commercial facility on equal or better terms without the guarantee, they will. If they can’t, and you meet the GGS criteria, they may use the scheme to support your application.
You can mention that you’d like to be considered for GGS-backed finance when you apply, but ultimately the decision sits with the lender. The extra paperwork is minimal. In most cases, it’s a subsidy declaration confirming you haven’t exceeded the government’s rolling three-year limit, plus the standard documentation the lender would ask for anyway.
What lenders typically ask for
The exact requirements vary, but most lenders will want to see the following:
- Recent management accounts or filed accounts
- A business plan or summary of what the funding is for
- Bank statements (usually three to six months)
- Details of existing debts and any previous government-backed borrowing
- Information on directors and significant shareholders
- A signed subsidy declaration
If you’re applying for asset finance, you’ll also need details of the asset you’re purchasing. For invoice finance, lenders will want to see your debtor book.
What makes a stronger application
Lenders under the GGS still apply their normal commercial judgement. The guarantee makes them more willing to lend, but it doesn’t override their risk criteria. A few things can meaningfully improve your chances.
Clean, up-to-date financials matter more than people think. If your management accounts are six months old or your books are messy, some lenders won’t look past that. Getting your numbers current before you apply is one of the simplest things you can do, and one of the most overlooked.
Be specific about what the funding is for. “Working capital” is technically a valid answer, but “we need £150,000 to hire three engineers ahead of a confirmed contract starting in April” gives the lender something concrete to assess. The more clearly you can connect the borrowing to a business outcome, the easier you make the lender’s decision.
If you’ve been declined elsewhere, say so and explain what’s changed or why a different product might be a better fit. Lenders expect this. It’s not a black mark. Over 70 lenders are accredited under the GGS, and they have very different appetites for risk, sector, and deal size. A no from one is not a no from all.
If you’re not sure where to start, that’s what we’re here for. At Greenwood Capital, we work with a panel of 100+ lenders, including GGS-accredited providers. Rather than approaching lenders one by one, you can apply through us and we’ll match you with the ones most likely to approve your application, often within days.
Recent changes to the Growth Guarantee Scheme
The scheme has changed a lot since it launched in July 2024. If you looked into it last year and ruled it out, the picture is different in 2026.
Extended to March 2030
The GGS was originally set to close on 31 March 2026. The 2025 Spending Review extended it through to 31 March 2030, with the government increasing the British Business Bank’s funding by two-thirds. That means the scheme isn’t going anywhere soon. If you’re planning an investment for later this year or next, the Growth Guarantee Scheme will still be available.
£500 million in additional capacity for tariff-affected businesses
In April 2025, the Chancellor announced an extra £500 million in lending capacity specifically aimed at smaller businesses dealing with cashflow pressure from changes to global tariff rates. This doesn’t change the scheme’s terms or eligibility criteria. It just means more money is available through GGS-accredited lenders for businesses that need support managing the impact of trade disruption. If rising import costs or supply chain shifts have squeezed your margins, this applies to you.
The Green GGS pilot
The British Business Bank is running a pilot variant of the scheme designed to support businesses investing in green assets. Things like solar panels, electric vehicles, heat pumps, or other equipment that supports the transition to a low-carbon economy.
The problem it’s solving is that lenders are often cautious about financing green assets because the second-hand market for them is still immature. If a borrower defaults, the lender isn’t confident they can recover the asset’s value. The Green GGS addresses this by providing an enhanced guarantee that sets a floor on the lender’s potential losses.
It’s still a pilot at this stage, running with a single lender and an initial portfolio of £30 million. But it signals where the scheme is heading. If your business is considering an investment in sustainable equipment, ask your lender whether Green GGS-backed finance is available.