Updated: New Government-Backed Growth Guarantee Scheme (GGS)

Scalable Growth With New Government-Backed Growth Guarantee Scheme (GGS)

Starting from 1st July 2024, UK small and medium-sized enterprises (SMEs) have a new avenue for securing finance with the launch of the Growth Guarantee Scheme (GGS). This scheme, replacing the Recovery Loan Scheme (RLS), is set to support businesses in their growth and investment efforts until 31st March 2026.

What is the Growth Guarantee Scheme (GGS)?

The Growth Guarantee Scheme is designed to help UK smaller businesses access essential finance. Whether you’re looking to invest in new projects, expand your operations, or manage day-to-day expenses, the GGS provides a robust financial backing. Accredited lenders will offer a variety of financial products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending, all under the new scheme.

Key Features of the GGS That Benefit Your Business

• Security Assurance: Your Principal Private Residence cannot be taken as security.
• Government-Backed Guarantee: A 70% government-backed lender guarantee makes finance more accessible.
• Flexible Loan Amounts: Borrowing is available across multiple products varying from £1,000 up to £2,000,000.
• Competitive Rates: Enjoy competitive fixed interest rates.
• For SMEs: Available to SMEs with a turnover up to £45m.
• Versatile Use of Funds: Use funds for any genuine business reason.
• Eligibility for Previous Applicants: Former applicants of CBILS, BBL, or RLS qualify.
• Extended Repayment Terms: Repayment terms up to 6 years.

More information from source, can be found here at The British Business Bank Website

Is My Business Suitable for the Growth Guarantee Scheme?

To be eligible for the GGS, your business must meet the following criteria:

• UK Trading: Your business must be trading in the UK.
• Turnover from Trading Activity: Getting more than 50% of turnover from trading activities.
• Turnover Limit: Have a turnover less than £45m a year.
• Insolvency Status: Not currently engaged in insolvency proceedings.

How Does the Guarantee Work?

The GGS provides a 70% government-backed guarantee to lenders. This means if a business is unable to repay the loan, the lender can recover some of the funds from the government. This guarantee encourages lenders to approve more loan applications, thereby supporting more businesses. However, it’s important to note that the guarantee is to the lender, not the business, so you and your business remain 100% liable for the debt.

Transition from the Recovery Loan Scheme (RLS)

The Recovery Loan Scheme has successfully supported UK businesses since the Covid-19 pandemic, with the third iteration offering over £1bn in finance since August 2022. The GGS will continue this support with updated terms to ensure continuity and consistency for lenders and businesses alike. Businesses that borrowed under CBILS, BBLS, or RLS before June 30, 2024, remain eligible for the GGS, although previous borrowing may affect the maximum amount available under the new scheme.

Apply for the Growth Guarantee Scheme

Lenders are working diligently to make the GGS available. If you’re considering applying for a business loan, the GGS offers an excellent opportunity to secure the necessary finance with government-backed assurance and hopefully in the coming months more lenders will be offering it across their platforms and services.

WATCH OUR SHORT VIDEO ON GGS

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Frequently Asked Questions

Q: What is the Growth Guarantee Scheme (GGS)? A: The GGS is a government-backed scheme designed to help UK SMEs access finance for growth and investment, replacing the Recovery Loan Scheme from 1st July 2024.

Q: Who is eligible for the GGS? A: UK businesses with a turnover up to £45m, generating more than 50% of turnover from trading activities, and not involved in insolvency proceedings.

Q: What are the loan amounts and terms? A: Businesses can borrow up to £2,000,000 with repayment terms up to 6 years across different financial products.

Q: Can previous applicants of CBILS, BBLS, or RLS apply? A: Yes, businesses that previously borrowed under these schemes are eligible for the GGS.

Q: How does the 70% government-backed guarantee work? A: The guarantee helps lenders approve more loans by covering 70% of the loan amount if the business cannot repay, although the business remains 100% liable for the debt.

Q: What types of finance products are available under GGS?A: Accredited lenders offer term loans, overdrafts, asset finance, invoice finance, and asset-based lending under the GGS.

Q: When is the Growth Guarantee Scheme (GGS) available?A: The Growth Guarantee Scheme (GGS) is officially live as of 1st July 2024. However, lenders that are opted into the scheme are currently working hard to integrate it into their offerings. In the meantime, there are many other financing options available that James Murray Finance can assist you with to help you secure the funding you need. Contact us today to explore all your financing options and find the best solution for your business.

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