Growth Guarantee Scheme: what the 70% guarantee really means

GGS replaced the third iteration of the Recovery Loan Scheme on 1 July 2024. It is delivered through more than 70 accredited banks, challenger lenders and specialist finance providers. A business approaches one of those lenders directly; the British Business Bank does not make the lending decision.

Under the terms currently published by the British Business Bank, most eligible business groups can access up to £2 million across participating lenders. The Northern Ireland maximum is generally £1 million, with lower limits for primary agriculture and primary fisheries or aquaculture because different subsidy rules apply.

Term loans and asset finance can run from three months to six years. Overdrafts, invoice finance and asset-based lending can run from three months to three years. The lender decides the amount, price, term, security and whether any personal guarantee is required.

A qualifying applicant must trade in the UK and, as a group, normally have turnover of no more than £45 million. More than half of its income should generally come from trading activity. The lender must judge that the business has a viable proposition and is not in relevant insolvency proceedings.

The scheme is designed to improve access, not replace normal underwriting. Lenders will still test historic performance, affordability, cash flow, management information and the purpose of the facility. Existing Bounce Back Loans, CBILS, CLBILS or earlier Recovery Loan Scheme borrowing does not automatically prevent an application, although it may affect affordability and subsidy headroom.

Government announced £6.5 billion of additional lending capacity in July 2026. The package is intended to raise annual supported lending to £3.35 billion by 2028/29, increase the turnover ceiling to £54 million and allow terms of up to ten years for loans up to £1.1 million.

Those enhanced rules are being operationalised by participating lenders. Until a lender confirms otherwise, applicants should work from the current £45 million turnover ceiling and six-year maximum for term loans and asset finance. Ask the lender which version of the rules it is applying and get the proposed term in writing.

The programme already has material scale. At 30 June 2026, GGS and the third Recovery Loan Scheme iteration together had supported 22,947 facilities worth £3.96 billion. That shows reach, not automatic eligibility: every facility remains a commercial credit decision.

The 70% guarantee is between government and the lender. If the business defaults, the lender follows its normal recovery process first and can then claim part of its remaining eligible loss. The business remains responsible for the entire outstanding balance, interest and any applicable fees.

A lender can take security and may ask directors or shareholders for a personal guarantee. Under the scheme, a principal private residence cannot be taken as security, but that restriction does not make a guarantee risk-free. Other personal assets may still be exposed depending on the document. Directors should understand whether their liability is capped, joint and several, continuing, and inclusive of enforcement costs.

Treat the scheme label as one feature of the offer, not evidence that it is the cheapest option. Compare the annual rate and reference-rate margin, arrangement and broker fees, total repayable, repayment frequency, security package, covenants, early-settlement terms and consequences of a missed payment.

Match the finance structure to the use. A term loan can suit a defined investment with predictable payback. A revolving or overdraft facility may better fit temporary working-capital swings. Asset or invoice finance can be more closely tied to the asset or receivable producing the funding need.