What is the Growth Guarantee Scheme and how does it work?

What the Growth Guarantee Scheme Is

The Growth Guarantee Scheme (GGS) is the current UK government-backed lending scheme for established businesses, administered by the British Business Bank on behalf of the Department for Business and Trade. Rather than lending money directly, GGS works by giving accredited commercial lenders a partial government guarantee on qualifying finance, which reduces the lender’s risk and, in turn, widens the range of businesses they’re willing to fund.

It’s aimed at smaller and mid-sized businesses that are already trading and looking to invest and grow, which distinguishes it from Start Up Loans, the other live government-backed scheme, which is built for founders starting out or in their first few years. If your business hasn’t started trading yet, our Start Up Loans guide is the more relevant read.

It Replaced the Recovery Loan Scheme

GGS didn’t appear from nowhere. It’s the direct successor to the Recovery Loan Scheme (RLS), which had run since 2021 across several iterations, originally introduced as part of the government’s Covid-19 economic response and later kept running as a general recovery and growth tool. RLS closed to new applications on 30 June 2024, and GGS launched the following day, on 1 July 2024, carrying forward the same guarantee-based approach under new branding and refreshed terms.

If you come across older content referring to the “Recovery Loan Scheme” as something you can currently apply for, treat it as out of date. RLS has not accepted new applications since mid-2024; any live government-backed lending for established businesses now runs through GGS.

Loan Sizes, Terms and What It Covers

GGS isn’t a single loan product; it’s a guarantee that can sit behind several different types of commercial finance, provided through a panel of accredited lenders rather than the government directly:

• Term loans
• Asset finance
• Invoice finance and asset-based lending
• Overdrafts

As of the July 2026 expansion, the key parameters are:

• Maximum facility size: up to £2 million per business group in Great Britain (up to £1 million in Northern Ireland).
• Term loans and asset finance: terms of up to 10 years for facilities up to £1.1 million, extended from a previous 6-year maximum as part of the July 2026 changes.
• Overdrafts and invoice finance: shorter terms, typically up to 3 years.
• Government guarantee: 70% of the outstanding balance, paid to the lender, not the borrower, if the business defaults and normal recovery is exhausted.

Because the finance is delivered through individual accredited lenders rather than a single government-run facility, the exact minimum loan size, pricing, and product mix vary by lender. There is no single fixed interest rate across GGS in the way there is with Start Up Loans; each accredited lender prices its own GGS-backed facilities based on its normal commercial criteria.

The July 2026 Expansion

In July 2026, the Chancellor announced a significant expansion of GGS as part of a wider package to support smaller business finance. The two changes most relevant to eligibility and terms were:

• The annual turnover threshold for eligible businesses rose from £45 million to £54 million, opening the scheme to a wider band of scaling businesses that had previously been just over the old cap.
• The maximum term on term loans and asset finance facilities up to £1.1 million was extended from 6 years to 10 years, giving businesses longer to repay larger facilities.

The government has said the expansion is intended to unlock several billion pounds of additional market lending over the following few years, alongside the scheme’s extension (confirmed in the 2025 Spending Review) to run until 31 March 2030. Given how recently these changes landed, it’s worth double-checking the current figures directly with the British Business Bank or an accredited lender before you apply, since terms on this scheme have moved more than once in the last two years.

Eligibility

To qualify for GGS, a business generally needs to:

• Be based and trading in the UK, with more than 50% of turnover coming from UK trading activity.
• Have annual turnover of no more than £54 million (following the July 2026 increase).
• Demonstrate a viable business proposition and not be in relevant insolvency proceedings or in financial difficulty at the point of application.
• Not fall into an excluded category (the scheme, like Start Up Loans, does not cover certain regulated financial activities and a small number of other restricted sectors).

Sole traders, limited companies, partnerships, co-operatives, and charities engaged in eligible trading activity can all potentially qualify, subject to the individual accredited lender’s own criteria. In practice, most lenders offering GGS-backed facilities want to see a meaningful trading history, commonly around two years, since the scheme is built around supporting established businesses rather than pre-revenue ones. A business without that track record is more likely to be pointed toward Start Up Loans instead, or toward an unguaranteed commercial alternative if it’s already trading but still very new.

The Guarantee Protects the Lender, Not You

This is worth repeating in scheme-specific terms, because it’s the point most searches for “growth guarantee scheme” are really trying to resolve: the 70% guarantee is a payment the government makes to the lender, after the fact, if your business has defaulted and the lender can’t recover the balance through normal channels. It is not a form of insurance that protects you, and it does not reduce the amount you owe.

You remain 100% liable for the full facility. If your lender also takes a personal guarantee from you directly, as many commercial lenders do on larger facilities regardless of any government guarantee sitting behind the deal, that personal guarantee stands entirely separately from the government’s arrangement with the lender. Two different guarantees, two different beneficiaries: the government’s guarantee protects the lender, and any personal guarantee you’ve signed protects the lender again, just from you specifically.

How to Access GGS

There’s no direct government application for GGS. You apply to one of the scheme’s accredited lenders in the same way you’d apply for any other commercial facility, and the lender decides whether to structure the deal with the government guarantee attached, based on its own credit and affordability assessment. The British Business Bank publishes the current list of accredited lenders.

Because the guarantee sits behind the lender’s own product, not a separate government one, the practical experience of applying looks like a normal commercial finance application: you’ll be asked for accounts, management information, and a clear explanation of what the money is for, and the lender will run its usual credit and affordability checks. The guarantee is a factor in the lender’s decision-making, not a replacement for it.

GGS vs an Unguaranteed Commercial Loan

For a business that comfortably meets a mainstream lender’s normal criteria, GGS may not change much: an unguaranteed facility from the same lender could carry similar pricing and terms. Where the guarantee tends to matter is at the margin, businesses that are creditworthy but sit just outside a lender’s usual comfort zone, whether because of a shorter trading history, a thinner asset base to secure against, or a sector the lender would otherwise be cautious about. In those cases, the guarantee can be the difference between an approval and a decline, or between an unsecured deal and one the lender would otherwise have insisted on securing more heavily.

It’s worth asking any lender you approach directly whether a given facility is being offered with or without the GGS guarantee, and what difference, if any, that makes to the rate or terms you’re being quoted. Not every accredited lender applies the guarantee to every deal it writes, and the guarantee itself is not something you request; it’s something the lender chooses to attach based on its own risk assessment of your application.

Lendus is an introducer, not a lender, a credit broker, or an accredited GGS provider. We can help you work out whether your business is more likely to be a GGS candidate or a better fit for unguaranteed commercial finance, and point you toward lenders worth approaching, but the application itself always sits directly between you and the lender you choose.