Extra £500m boost for small firms via Growth Guarantee Scheme

Smaller businesses across the UK impacted by global tariff changes will benefit from an extra £500 million in lending support through the British Business Bank’s Growth Guarantee Scheme, the Chancellor announced over the weekend.

The additional capacity is aimed at helping businesses manage cashflow pressures caused by shifting international trade costs. Firms can apply for up to £2 million in finance by contacting one of the scheme’s accredited lenders.

Delivered by the British Business Bank, the Growth Guarantee Scheme has already supported £2.1 billion in lending through over 13,000 facilities. With the new boost, around 50 accredited lenders will now have greater capacity to offer term loans, overdrafts, and other finance products to support viable businesses.

Reinald de Monchy, Co-Chief Banking Officer at the British Business Bank, said: “The Growth Guarantee Scheme can be used counter-cyclically, enabling smaller businesses to obtain funding during times of uncertainty such as we are experiencing currently.

“It is therefore important and necessary to see additional capacity made available to support smaller UK businesses at this time.”

The scheme offers lenders a 70% government-backed guarantee on loans, though borrowers remain fully liable for repayments. Decisions on lending remain at the discretion of each lender, who will conduct their usual credit and fraud checks.

Key features of the scheme include:

Up to £2 million in lending per business group (or £1 million for businesses under the Northern Ireland Protocol)
Wide range of products available, including loans and overdrafts to support cashflow
Government guarantee of 70% to the lender, not the borrower
Commercial terms apply – businesses must be able to afford the finance

Businesses are advised to first approach their current lender or explore other accredited lenders listed on the British Business Bank’s website.

The announcement follows the Autumn Budget 2024, which allocated over £1 billion to the British Business Bank for continued support through 2025/26. This funding also includes support for housebuilders, start-ups, and high-growth firms in key sectors such as life sciences.