SMEs looking to invest, expand, or manage cash flow have a new financial tool at their disposal – the Growth Guarantee Scheme (GGS).
Launched on 1 July 2024, the GGS replaces the Recovery Loan Scheme and aims to improve access to finance for smaller UK businesses through tailored funding options.
What is the Growth Guarantee Scheme?
The GGS is designed to support SMEs by improving the terms of finance on offer, helping businesses access loans, overdrafts, asset finance, invoice finance, and asset-based lending.
It provides lenders with a 70 per cent Government-backed guarantee, reducing risk and encouraging financial institutions to lend.
Facility sizes range from as little as £1,000 (for some lending types) to £2 million, with repayment terms of up to six years for loans and asset finance, and up to three years for overdrafts and invoice finance.
Businesses that utilised previous Government schemes like CBILS, CLBILS, or the Recovery Loan Scheme can still apply for the GGS.
The scheme is open to businesses with turnover under £45 million, trading in the UK and generating more than 50 per cent of their income from trading activity.
Each business that applies must have a viable business proposition, as assessed by each lender in order to access the finance on offer.
How can you use the funds?
Funds can be applied towards a range of business needs, from investing in growth to managing cash flow.
However, businesses must demonstrate their ability to afford additional debt finance.
The GGS is considered a Government subsidy, meaning businesses need to confirm that the new funding will not push them beyond their three-year subsidy cap.
While lenders may request personal guarantees, Principal Private Residences are excluded from security within the scheme.
How we can help
Our team is here to help SMEs assess their eligibility, prepare financial statements, and explore funding options that align with their goals.
If you’re considering applying for finance through the Growth Guarantee Scheme or exploring other funding opportunities, get in touch with our friends at Harbourside Corporate Finance by visiting www.harboursidecf.co.uk.