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Loan guarantee
Loan guaranteeGrowthBritish Business Bank

Growth Guarantee Scheme

Successor to the Recovery Loan Scheme. A government-backed guarantee enabling accredited lenders to offer term loans, asset finance, invoice finance, overdrafts and revolving credit to UK smaller businesses.

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Quick answer

The Growth Guarantee Scheme helps smaller UK businesses access debt finance when they would otherwise struggle. The British Business Bank provides accredited lenders with a 70% government guarantee on each facility, supporting term loans, asset finance, invoice finance and revolving credit. Businesses apply directly to participating lenders, not to the Bank, and standard lender credit checks apply.

Advisor summary

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. It enables accredited lenders to provide term loans, asset finance, invoice finance, overdrafts and revolving credit to UK smaller businesses, backed by a 70% British Business Bank guarantee to the lender. The borrower remains 100% liable for the debt — the guarantee protects the lender, not the borrower.

Key takeaways

  • Government-backed guarantee — not a grant or subsidy.
  • 70% guarantee to accredited lenders on each facility.
  • Facility types: term loans, asset finance, invoice finance, overdrafts and revolving credit.
  • Eligibility: UK SMEs with turnover under £45m, trading commercially and viable.
  • Borrower remains 100% liable for the debt.
  • Often used alongside equity and grant funding in a blended capital plan.

Who this is for

UK-based smaller businesses (turnover under £45m) trading commercially and viable in the lender's assessment. Typically a UK SME with a clear growth plan, demonstrable repayment capacity, and a finance function able to present management accounts on demand.

Frequently asked questions

What is the Growth Guarantee Scheme?

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. It enables accredited lenders to offer term loans, asset finance, invoice finance, overdrafts and revolving credit to UK smaller businesses, backed by a 70% British Business Bank guarantee to the lender.

Who is eligible?

UK-based smaller businesses with turnover under £45m, trading commercially and viable in the lender's assessment.

Does the guarantee protect the borrower?

No. The guarantee protects the lender, not the borrower. You remain 100% liable for the debt.

What facility types are available?

Term loans, asset finance, invoice finance, overdrafts and revolving credit through accredited lenders. The right shape depends on the underlying capital need.

How do I find accredited lenders?

The British Business Bank publishes the current list of accredited lenders. Each lender runs its own credit process within the scheme rules.

What do lenders look for?

A defensible 24-month cash-flow forecast, clear use of funds, clean management accounts and a credible answer to downside scenarios.

Why do applications fail?

Weak forecasts, unclear use of funds, gaps in trading history, or borrowing into a model that has not been stress-tested.

Is this debt or a grant?

It is debt. Government-backed lending is still lending — repayment terms matter as much as headline access. Take advice on personal guarantees and security before signing.

How does it fit with equity and grants?

Often used alongside equity, grants and supplier credit. The right blend depends on dilution tolerance and growth horizon.

Where is the official scheme published?

The British Business Bank publishes scheme details and the accredited lender list at british-business-bank.co.uk.

Advisor reviewed· Last reviewed

Read end-to-end by a FundingAtlas editor against the official source.

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Funding amount

Varies

Region

United Kingdom

Stage

Growth

Provider

British Business Bank

Advisor summary

The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. It enables accredited lenders to provide term loans, asset finance, invoice finance, overdrafts and revolving credit to UK smaller businesses, backed by a 70% British Business Bank guarantee to the lender. The borrower remains 100% liable for the debt — the guarantee protects the lender, not the borrower.

Key takeaways

  • Government-backed guarantee — not a grant or subsidy.
  • 70% guarantee to accredited lenders on each facility.
  • Facility types: term loans, asset finance, invoice finance, overdrafts and revolving credit.
  • Eligibility: UK SMEs with turnover under £45m, trading commercially and viable.
  • Borrower remains 100% liable for the debt.
  • Often used alongside equity and grant funding in a blended capital plan.

Who this is for

UK-based smaller businesses (turnover under £45m) trading commercially and viable in the lender's assessment. Typically a UK SME with a clear growth plan, demonstrable repayment capacity, and a finance function able to present management accounts on demand.

Real-world use cases

Working capital term loan

A growing services SME takes a Growth Guarantee Scheme term loan from an accredited lender for working capital expansion.

Asset finance

A manufacturing SME uses the scheme to fund equipment acquisition via an accredited asset-finance partner.

Invoice finance facility

An SME with strong receivables takes an invoice-finance facility under the scheme to smooth cash conversion.

Revolving credit alongside equity

A scale-up uses a Growth Guarantee revolver to extend runway between equity rounds.

What to prepare before applying

  1. 1

    Confirm eligibility

    UK SME, turnover under £45m, viable trading.

  2. 2

    Choose facility type

    Term loan, asset finance, invoice finance, overdraft or revolving credit.

  3. 3

    Identify accredited lenders

    British Business Bank publishes the current list.

  4. 4

    24-month cash-flow forecast

    Stress-tested against downside scenarios.

  5. 5

    Clean management accounts

    Lender will request on demand.

  6. 6

    Use-of-funds narrative

    Clear deployment plan.

  7. 7

    Personal-guarantee analysis

    Understand security required by the lender.

  8. 8

    Documentation pack

    Financials, KYC and lender-specific requirements.

Common mistakes

  • Treating guarantee as borrower protection

    Guarantee covers the lender, not the borrower.

  • Optimistic forecast

    Must survive a downside scenario.

  • Unclear use of funds

    Vague deployment plan weakens credit case.

  • Signing without security review

    Personal guarantees and security require advice.

  • Ignoring debt service ratios

    Repayment capacity must be demonstrable.

Common rejection reasons

  • Weak forecasts

    Cannot evidence repayment capacity.

  • Unclear use of funds

    Lender cannot underwrite the credit case.

  • Gaps in trading history

    Insufficient track record.

  • Untested model

    Plan has not survived a stress-test scenario.

Alternative funding routes

  • Start Up Loans

    For founders of businesses under 36 months.

  • EIS / SEIS

    Equity finance with investor tax reliefs.

  • British Patient Capital

    Co-investment for growth-stage scaleups.

  • Innovate UK Innovation Loans

    Late-stage R&D loans.

  • Asset-finance providers

    Direct equipment finance outside the scheme.

  • Regional growth funds

    Equity and debt across UK regions.

Typical funding journey

  1. 1

    Eligibility check

    Confirm UK SME under £45m turnover, viable.

  2. 2

    Choose facility type

    Match capital need to facility shape.

  3. 3

    Shortlist accredited lenders

    Use British Business Bank list.

  4. 4

    Prepare cash-flow forecast and accounts

    Stress-tested 24 months.

  5. 5

    Submit application to lender

    Each lender has its own process.

  6. 6

    Credit assessment

    Typically several weeks.

  7. 7

    Facility documentation and security

    Review personal guarantees before signing.

  8. 8

    Drawdown and repayment

    Per facility terms.

  9. 9

    Annual review

    Refresh facility against original use-of-funds.

Advisor view

This is debt, not a grant — repayment terms matter as much as headline access. Build a realistic cash flow that survives a 12-month sales slip.

Usually too early when

Advisor signal

You have no trading history, no realistic cash flow forecast, no clear use of funds, or you would struggle to service the loan if revenue softened.

Eligibility

UK-based smaller businesses (turnover under £45m) trading commercially and viable in the lender's assessment. Borrower remains 100% liable for the debt.

Common reasons applications fail

Weak forecasts, unclear use of funds, gaps in trading history, or borrowing into a model that has not been stress-tested.

What improves your odds

A defensible 24-month cash flow, clear use of funds, clean management accounts, and a credible answer to growth-slips scenarios.

Typical successful applicant

A UK SME with a clear growth plan, demonstrable repayment capacity, and a finance function able to present management accounts on demand.

Common misconceptions

Government-backed lending is still lending. The guarantee protects the lender, not the borrower; you are personally accountable for repayment.

What comes next

Set up disciplined monthly management accounts, hold a cash buffer, and review the facility annually against original use-of-funds.

Funding context

Often used alongside equity, grants and supplier credit. The right blend depends on dilution tolerance and growth horizon.

Eligibility Quick Check

A cautious, rules-based check using only the criteria already published for this programme. Not a guarantee — always verify against the official source.

Frequently asked questions

What is the Growth Guarantee Scheme?
The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. It enables accredited lenders to offer term loans, asset finance, invoice finance, overdrafts and revolving credit to UK smaller businesses, backed by a 70% British Business Bank guarantee to the lender.
Who is eligible?
UK-based smaller businesses with turnover under £45m, trading commercially and viable in the lender's assessment.
Does the guarantee protect the borrower?
No. The guarantee protects the lender, not the borrower. You remain 100% liable for the debt.
What facility types are available?
Term loans, asset finance, invoice finance, overdrafts and revolving credit through accredited lenders. The right shape depends on the underlying capital need.
How do I find accredited lenders?
The British Business Bank publishes the current list of accredited lenders. Each lender runs its own credit process within the scheme rules.
What do lenders look for?
A defensible 24-month cash-flow forecast, clear use of funds, clean management accounts and a credible answer to downside scenarios.
Why do applications fail?
Weak forecasts, unclear use of funds, gaps in trading history, or borrowing into a model that has not been stress-tested.
Is this debt or a grant?
It is debt. Government-backed lending is still lending — repayment terms matter as much as headline access. Take advice on personal guarantees and security before signing.
How does it fit with equity and grants?
Often used alongside equity, grants and supplier credit. The right blend depends on dilution tolerance and growth horizon.
Where is the official scheme published?
The British Business Bank publishes scheme details and the accredited lender list at british-business-bank.co.uk.

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