Access to finance can make the difference between a business having an opportunity and actually being able to act on it.

A manufacturer may have secured a major new contract but need additional machinery to fulfil it. A construction company may want to purchase equipment rather than continue hiring it. A wholesaler may need additional working capital to purchase stock, while another business may be ready to open new premises, invest in technology or expand its workforce.

In each situation, the underlying business may be viable and growing but accessing the capital required to make the next move can still be challenging.

This is where the Growth Guarantee Scheme (GGS) can play an important role.

The Growth Guarantee Scheme is a UK Government-backed initiative administered by the British Business Bank. It is designed to support access to finance for smaller UK businesses looking to invest and grow.

For business owners searching for Government Funding, a Government Loan, Government-backed business funding or a Govt Loan, the Growth Guarantee Scheme is one of the key funding programmes worth understanding.

At Principal Business Finance, we work with a wide panel of lenders, including lenders participating in the Growth Guarantee Scheme, and can help eligible businesses explore suitable funding options.

In this guide, we’ll explain what the Growth Guarantee Scheme is, how it works, who may qualify, what the funding can be used for and how Principal Business Finance can help arrange the finance.

What Is the Growth Guarantee Scheme?

The Growth Guarantee Scheme, commonly shortened to GGS, is the successor to the Recovery Loan Scheme.

It launched in July 2024 and is designed to improve access to finance for smaller UK businesses looking to invest, manage cash flow and grow.

The scheme operates through accredited lenders.

Rather than the Government lending money directly to the business, an accredited lender provides the finance.

The Government then provides the lender with a 70% guarantee against the outstanding balance of the facility, subject to the rules of the scheme.

There is one extremely important distinction:

The Government guarantee is provided to the lender not the borrower.

The borrowing business remains 100% liable for repaying the facility.

The 70% guarantee should therefore not be interpreted as the Government paying 70% of your business loan.

Is the Growth Guarantee Scheme Still Available?

Yes.

The Growth Guarantee Scheme remains open for applications through accredited lenders and is scheduled to continue until 31 March 2030.

This provides businesses with a significant window in which Government-backed funding may be available to support investment and growth.

The scheme has also received further Government backing, with a significant expansion announced in July 2026.

This included plans for additional lending capacity and proposed changes designed to make the scheme accessible to a broader range of growing businesses.

Businesses should always check the latest scheme criteria when applying because eligibility requirements and individual lender offerings can change.

How Much Can Businesses Currently Borrow?

Under the current published scheme terms, the Growth Guarantee Scheme can generally support facilities of up to £2 million per business group for businesses outside the scope of the Northern Ireland Protocol.

Different limits can apply to businesses within scope of the Northern Ireland Protocol and certain sectors.

The amount actually available to an individual business will depend on factors including:

• Turnover
• Profitability
• Existing borrowing
• Affordability
• Business performance
• Purpose of the funding
• Credit profile
• Lender criteria

The maximum scheme amount should therefore not be viewed as an automatic borrowing entitlement.

New Growth Guarantee Scheme Expansion Announced in 2026

The Government announced a significant expansion of the Growth Guarantee Scheme in July 2026.

The British Business Bank announced a £6.5 billion uplift, intended to unlock further lending to UK businesses over the following four years.

Announced changes also include plans to:

• Increase the business turnover eligibility threshold from £45 million to £54 million
• Extend some Growth Guarantee Scheme facility terms from six years to ten years

These changes are intended to allow a broader range of scaling and high-potential businesses to benefit from the programme.

However, businesses should distinguish between announced future changes and the eligibility criteria currently being applied by individual lenders.

Principal Business Finance can help establish the current position with relevant lenders when considering an application.

Who Is Currently Eligible for the Growth Guarantee Scheme?

Under the current published criteria, the scheme is generally available to UK businesses with turnover of up to £45 million.

For most businesses, more than 50% of turnover must be generated from trading activity.

The business must also be carrying out trading activity in the UK and have a borrowing proposal that the lender considers viable.

Businesses in relevant insolvency proceedings or otherwise considered a “business in difficulty” are not eligible.

Most sectors can potentially qualify, although exclusions apply.

Ultimately, the lender decides whether it is willing to provide the finance.

You Don’t Automatically Qualify Because the Loan Is Government-Backed

This is an important misconception.

The Growth Guarantee Scheme doesn’t remove normal lending requirements.

Accredited lenders still undertake their normal assessments, which can include:

• Credit checks
• Affordability assessments
• Financial analysis
• Fraud checks
• Anti-Money Laundering checks
• Know Your Customer checks

The business must still demonstrate that the proposed borrowing is viable.

The Government guarantee helps support lender appetite—it doesn’t remove the lender’s responsibility to make a commercial lending decision.

What Types of Finance Are Available Through GGS?

One of the major benefits of the Growth Guarantee Scheme is that it isn’t limited to a conventional business loan.

Depending on the participating lender, the scheme can support several forms of commercial finance.

These include:

Term Loans (Business Loans)

A traditional Business Loan provides a lump sum that is repaid over an agreed term.

Businesses may use the funding for expansion, working capital, recruitment, acquisitions and other eligible business purposes.

Asset Finance

Asset Finance can support investment in equipment and machinery.

This could include:

• Manufacturing machinery
• Construction equipment
• Engineering equipment
• Agricultural machinery
• Catering equipment
• Medical equipment
• Technology
• Commercial assets

Invoice Finance

Invoice Finance can help businesses release cash tied up in outstanding customer invoices.

This can be particularly useful for growing B2B businesses where customers pay on 30, 60 or 90-day terms.

Overdrafts

Some accredited lenders may offer overdraft-style facilities through the scheme.

Asset-Based Lending

Certain lenders may also provide asset-based facilities depending on the business and available assets.

Not every accredited lender offers every product, making lender selection an important part of the process.

What Can a Growth Guarantee Scheme Loan Be Used For?

The Growth Guarantee Scheme is designed to support legitimate business purposes, including investment and growth.

There are numerous potential uses.

1. Purchasing Machinery and Equipment

Equipment investment can dramatically improve productivity.

A manufacturer, for example, might use funding to purchase:

• CNC machinery
• Robotics
• Production equipment
• Packaging machinery
• Forklifts
• Automation technology

Instead of delaying investment until sufficient cash reserves have accumulated, funding can enable the equipment to start generating revenue sooner.

2. Improving Working Capital

Growing businesses often consume cash.

A business can be profitable while experiencing significant cash flow pressure because money is tied up in:

• Stock
• Work in progress
• Customer invoices
• Supplier deposits

Government-backed business funding may help provide additional working capital to support that growth.

3. Recruiting Employees

Growth frequently requires additional people before the increased revenue arrives.

Funding could support the costs associated with recruiting:

• Salespeople
• Engineers
• Technicians
• Production staff
• Administrative employees
• Management

This can help businesses build capacity ahead of expected growth.

4. Purchasing Stock

Stock-intensive businesses can require significant working capital.

Wholesalers, retailers, manufacturers and e-commerce businesses may need to purchase inventory months before receiving payment from customers.

A Government-backed Business Loan could provide the capital needed to increase stock levels and support additional sales.

5. Investing in Technology and AI

Digital transformation is becoming increasingly important.

Businesses are investing in:

• Artificial Intelligence
• CRM platforms
• Automation
• Cyber security
• ERP systems
• Business software
• Cloud technology
• Robotics

Funding can enable businesses to implement these improvements sooner.

6. Purchasing Vehicles

Commercial vehicles are essential across many industries.

Funding could support investment in:

• Vans
• HGVs
• Specialist vehicles
• Construction vehicles
• Delivery vehicles
• Fleet expansion

The most suitable structure will depend on the asset and lender.

7. Expanding Premises

Growth may require:

• Additional warehouse space
• Larger offices
• Factory expansion
• New locations
• Workshop improvements

A Business Loan or other commercial finance solution could provide the capital required to complete the expansion.

8. Acquiring Another Business

Acquisition can provide a faster route to growth.

Purchasing another company can give an existing business access to:

• New customers
• Additional turnover
• Skilled employees
• New locations
• Intellectual property
• Additional products or services

Depending on the circumstances, GGS-backed lending may form part of an acquisition funding structure.

Growth Guarantee Scheme Example

Consider a successful engineering business generating £4 million annual turnover.

The company wins several new contracts but requires approximately £500,000 to increase capacity.

The investment includes:

• New CNC machinery
• Additional raw materials
• Recruitment
• Warehouse improvements
• Working capital

The directors don’t want to remove £500,000 from company reserves.

Instead, Principal Business Finance reviews the requirement and approaches suitable lenders.

Part of the requirement could potentially be structured through Asset Finance, while another element could be considered through a GGS-backed Business Loan, depending on eligibility and lender assessment.

This allows the company to invest while maintaining greater liquidity within the business.

Can You Get GGS If You’ve Previously Had BBLS, CBILS or RLS?

Potentially, yes.

Having previously received funding through schemes such as:

• Bounce Back Loan Scheme (BBLS)
• Coronavirus Business Interruption Loan Scheme (CBILS)
• Coronavirus Large Business Interruption Loan Scheme (CLBILS)
• Recovery Loan Scheme (RLS)

doesn’t automatically prevent a business from accessing GGS.

However, existing borrowing, affordability, subsidy limits and scheme rules will be considered.

Are Personal Guarantees Required?

Personal guarantees may be requested.

Participating lenders are permitted to take personal guarantees where this forms part of their normal lending practices.

However, under the scheme rules, a borrower’s principal private residence cannot be taken as security.

Whether a Personal Guarantee is required will depend on the lender, facility and circumstances of the application.

Why Work With a Commercial Finance Broker?

One of the challenges with GGS is that accredited lenders don’t necessarily have identical lending criteria.

A business declined by one lender could potentially meet another lender’s criteria.

Likewise, not every lender offers every GGS-supported finance product.

A commercial finance broker can help businesses navigate the market rather than approaching lenders individually.

At Principal Business Finance, we can assess the requirement, understand the business and approach lenders whose criteria align with the transaction.

What Information Could You Need?

Providing strong information can make the funding process considerably easier.

Depending on the application, lenders may request:

• Latest filed accounts
• Management accounts
• Business bank statements
• Details of existing borrowing
• Funding purpose
• Asset quotations
• Cash flow forecasts
• Business plans
• Details of directors
• Supporting information about contracts or growth plans

The exact requirements vary between lenders and transactions.

Being prepared can help make the process more efficient.

How Principal Business Finance Can Arrange Growth Guarantee Scheme Funding

At Principal Business Finance, we help UK businesses access funding from a broad panel of commercial lenders.

Where the Growth Guarantee Scheme is appropriate, we can work with participating lenders to explore GGS-backed funding options.

The process typically involves understanding:

Your business

We want to understand what you do, how the company performs and where it’s heading.

Your funding requirement

We’ll establish how much funding is required and exactly how it will be used.

The appropriate funding structure

A Business Loan isn’t always the only solution.

Depending on the requirement, Asset Finance, Invoice Finance or another commercial finance product may be more appropriate.

Suitable lenders

We can approach lenders whose criteria align with the transaction.

Application management

Our team can manage the process from initial enquiry through to completion.

Government Funding Doesn’t Always Mean GGS Is the Best Option

Another important consideration is that GGS isn’t automatically the best funding solution simply because it carries a Government-backed guarantee.

Under the scheme, lenders should only use GGS where they cannot provide equivalent or better funding without the guarantee.

A conventional commercial facility could therefore sometimes provide better terms.

This is why it’s important to consider the broader lending market rather than focusing exclusively on one product.

At Principal Business Finance, we can explore both GGS-backed and conventional commercial finance options depending on your circumstances.

Government Funding for Business Growth

Businesses frequently search online for terms such as:

Government Funding

Government Loan

Govt Loan

Government Business Loan

Government-backed Business Finance

The Growth Guarantee Scheme is one of the principal Government-backed debt finance programmes currently available to eligible UK SMEs.

But it remains commercial borrowing.

The business must be able to demonstrate affordability and remains responsible for repaying 100% of the facility.

Understanding that distinction is important when deciding whether GGS funding is suitable for your business.

Turning Growth Plans Into Investment

Businesses rarely grow by standing still.

Growth requires investment in people, machinery, technology, stock, premises and new opportunities.

The Growth Guarantee Scheme can provide eligible businesses with another route to accessing the capital required to make those investments.

With the scheme scheduled to run until 31 March 2030, and a significant expansion announced in 2026, GGS is likely to remain an important part of the UK SME funding landscape over the coming years.

At Principal Business Finance, we can help you understand the finance options available, identify suitable lenders and manage your application from enquiry through to completion.

Whether you’re searching for Government Funding, a Government Loan, a Govt Loan or Growth Guarantee Scheme funding, we’re here to help you explore the available options and find a funding structure that supports your business’s next stage of growth.