Growth Guarantee Scheme aims to help smaller Scottish businesses
British Business Bank has launched a new scheme to help smaller businesses in Scotland access the finance they need to invest and grow. The Growth Guarantee Scheme (successor to the Recovery Loan Scheme) hopes to support around 11,000 smaller businesses over the next 21 months until March 2026. The British Business Bank will administer the scheme on behalf of the Secretary of State for Business and Trade, providing lenders with a 70% government-backed guarantee.
There are 41 accredited lenders, with 20 lenders actively open for applications. The remaining lenders are currently going through the accreditation process and will be listed on the British Business Bank website over the coming weeks once fully accredited.
What types of finance are on offer?
These lenders will provide a wide range of finance types to smaller businesses, including term loans, overdrafts, asset finance, invoice finance and asset-based lending. The terms of the scheme will stay largely unchanged from the Recovery Loan Scheme.
Term loans and asset finance facilities are available from three months up to six years, with overdrafts, invoice finance and asset-based lending available from three months up to three years.
How much can be borrowed?
The minimum facility sizes start at £1,000 for asset finance, invoice finance and asset-based lending, £25,001 for term loans and overdrafts. The maximum is £2m per business group (depending on circumstances and the type of facility).
Businesses who accessed other schemes may be able to access the Growth Guarantee Scheme but the amount of funding available may be reduced.
Interest rates and fees charged by lenders will vary (taking into account the Government guarantee) and will depend on the specific lending proposal.
Personal guarantees can be taken at the lender’s discretion, however, Principal Private Residences cannot be taken as security within the scheme.
The Guarantee is to the lender and the scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process.The borrower always remains 100% liable for the debt.
In terms of eligibility, this criteria will be set by the lender. Lenders are required to undertake their standard credit and fraud checks for all applicants.
Further information is available on the British Business Bank website.