Government-Backed Growth Guarantee Scheme

Government-Backed Growth Guarantee Scheme

The Growth Guarantee Scheme (GGS) is a UK government initiative to promote lending to small and medium-sized enterprises (SMEs). Under this scheme, the government provides a 70% guarantee to lenders on the loans they extend to eligible businesses. However, it is important to note that this guarantee does not cover any interest or fees associated with the financing.

Lenders must certify that they would not have been able to offer financing to the applicants under their standard commercial terms or would have only been able to do so at a higher interest rate.

The GGS essentially extends the range of products lenders can offer, enabling them to fund businesses they previously could not support. This could be due to the businesses’ credit scores, trading history, turnover, or homeowner status.

Is My Business Eligible for the GGS?

The Growth Guarantee Scheme is primarily designed for small businesses. To be eligible, your business must meet the following criteria:

Turnover: Must be below £45 million.

Business Type: Limited companies, sole traders, limited liability partnerships, and cooperative societies are all eligible, provided they have been trading for over two years.

Exclusions: Banks, public sector companies, and businesses currently undergoing insolvency proceedings are not eligible. Additionally, businesses that derive more than 50% of their revenue from rentals or other non-trading activities are ineligible.

Funding Limit: Eligible businesses can receive up to £2 million in funding solutions.

Location: Must be based in the UK.

Business Plan: You must have a suitable business plan.

Businesses that have previously received support through the Recovery Loan Scheme (RLS) or the Bounce Back Loan Scheme (BBLS) can still apply for the GGS, provided they meet the eligibility criteria.

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