The Growth Guarantee Scheme — what the government guarantee does and does not do for a UK business borrower

The Growth Guarantee Scheme (GGS) gives an accredited lender a 70% government-backed guarantee against the outstanding balance of your facility — but only after that lender has already gone after you, and any security or personal guarantee, and come up short. You remain 100% liable for the debt throughout. GGS is not the government agreeing to pay if your business fails; it's the government sharing the lender's downside enough that the lender says yes to a deal it might otherwise decline. That distinction is the one thing worth getting right before you apply.

Key takeaways

What the Growth Guarantee Scheme actually is

GGS is the direct successor to the Recovery Loan Scheme (RLS), the Covid-era facility that ran in three phases. The Bounce Back Loan Scheme, CBILS and CLBILS all closed on 31 March 2021; RLS Phase 1 closed 31 December 2021, Phase 2 closed 30 June 2022, and Phase 3 closed 30 June 2024. Between them, the first two RLS phases supported £4.3 billion of finance to smaller UK businesses, and the third phase offered more than £1 billion between its August 2022 launch and its close. GGS took over on 1 July 2024 — a launch date confirmed independently by Barclays, Funding Circle and Innovate UK Business Connect.

One government communication complicates that timeline. A Treasury press release from 13 July 2026 states the scheme has delivered over £3.7 billion of financing "since its launch in 2022" — two years earlier than every accredited lender's own stated start date for GGS itself. That 2022 figure lines up with when RLS Phase 3 began, not when GGS replaced it, so the press release appears to be counting the lineage of the whole guarantee programme rather than GGS specifically. Either way, don't take a single government press release's phrasing as the definitive word on when the current scheme started — the lenders you'd actually borrow from are consistent on 1 July 2024.

GGS itself is administered by the British Business Bank on behalf of the Secretary of State for Business and Trade. The British Business Bank is a development bank wholly owned by HM Government, but it is not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority — which is exactly why it doesn't lend to you directly. It sets the rules and accredits the lenders; the lending itself, and the credit decision, sits entirely with the bank or lender you approach.

Who's actually eligible

The scheme-wide test is straightforward on paper: your business must be trading in the UK, with turnover not exceeding £45 million, and for most businesses more than 50% of income must come from trading activity. HSBC allows that turnover test to be based on a forecast if your business has been trading for less than 12 months, which matters if you're newer and don't yet have two full years of accounts to point to.

The range of legal structures the scheme accepts is wide: sole traders, corporations, limited partnerships, limited liability partnerships, co-operatives and community benefit societies, and effectively any other UK legal entity carrying out business activity. What's excluded is narrower but firm: banks, building societies, insurers and reinsurers (except insurance brokers), public sector bodies, and state-funded primary and secondary schools can't use the scheme. Individual lenders can add their own exclusions on top — Virgin Money, for instance, also rules out businesses whose principal activity is primary extraction of coal, lignite, crude petroleum or natural gas, along with certain related support activities. HSBC separately states a GGS loan must not be used to support export-related activities.

Don't assume the scheme's own £45 million ceiling is the ceiling you'll actually be assessed against. Funding Circle applies a stricter turnover limit of its own — under £30 million — on top of requiring at least two years of UK trading history and limited company status, none of which the scheme itself demands. That's a lender overlay, not a scheme rule, and it's exactly the kind of criterion that trips up an applicant who reads the government page and assumes every accredited lender applies the same bar. If a facility gets declined on grounds like these, our note on why business loan applications get declined is worth reading before you try a second lender.

If your business is genuinely early-stage — inside its first three years of trading — the British Business Bank's own Start Up Loans programme may be a better fit than GGS: loans from £500 to £25,000 at a fixed 6% per annum, rather than trying to qualify for a scheme built around larger, more established facilities.

Borrowers subject to the Northern Ireland Protocol face separate sector sub-limits: £170,000 for aquaculture and fisheries, and a lower cap for primary agriculture. If your business is NI Protocol-affected, get the exact current sub-limit for your sector from your accredited lender before you plan around a figure.

What it can fund, and how much

GGS isn't limited to term loans. It can support term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities — a genuinely broad set of working-capital and growth tools, not just a single loan product. Minimum facility sizes vary by product across the scheme as a whole: £1,000 for asset finance, invoice finance and asset-based lending, and £25,001 for term loans and overdrafts. The scheme-wide maximum is £2 million per business group for borrowers outside the scope of the Northern Ireland Protocol.

Each accredited lender then sets its own range within those bounds:

Lender	Facility size	Term
Barclays	Minimum £25,001	Term loans 12 months to 6 years
Funding Circle	£25,001–£250,000	2 to 6 years
HSBC	£25,001–£2,000,000 outside NI Protocol; £25,001–£1,000,000 within it	1 to 6 years
Virgin Money	Minimum £30,000 (term loans); maximum £2m outside NI Protocol, £1m within it	Up to 6 years
Santander	Minimum £25,001 across all products	3 months to 6 years (term loans); up to 3 years (overdrafts/revolving credit)

Notice that Virgin Money's own minimum of £30,000 sits above the scheme's baseline £25,001 — another example of a lender tightening the rules rather than simply passing on the government's own settings. And Funding Circle's £250,000 ceiling is a fraction of the scheme's £2 million maximum: which lender you approach genuinely changes what you can actually borrow, not just the price.

The guarantee: what it does, and what it very deliberately doesn't do

Barclays states it plainly: the scheme gives the lender a 70% government-backed guarantee against the outstanding balance of the facility, but only after the lender has completed its normal recovery process — and the borrower always remains 100% liable for the debt. Funding Circle says the same thing in different words: if a business can't repay, the lender can recover some of the funds from government, but the guarantee is to the lender, not the business, and the borrower is always 100% liable for the debt.

HSBC spells out the actual sequence: it will seek to recover the outstanding balance of the loan from the borrower, and the proceeds of any security, first — only after that will it look to realise the government guarantee. In practice, that means a lender exhausts every ordinary route to get its money back from you — chasing the debt, calling on any security, pursuing a personal guarantee if one was taken — before the government guarantee even enters the picture, and even then it only covers 70% of whatever's still outstanding after all of that.

A government press release describes GGS as providing "a 70% government guarantee on commercial loans to SMEs of up to £2 million, cutting credit risk and turning 'nos' into 'yeses'" — language that's accurate about what the guarantee does for the lender's risk appetite, but easy to misread as a promise to the borrower. It isn't. The guarantee exists to make a lender more willing to say yes to your application; it does nothing to reduce what you personally or your business owes if things go wrong.

A rough illustration: say a business takes a £500,000 GGS-backed term loan and later can't repay it. The lender pursues the business and any security in the usual way, and after recovery efforts nets back £300,000, leaving a £200,000 shortfall. The lender can then claim 70% of that shortfall — £140,000 — from government, absorbing the remaining £60,000 loss itself. What doesn't happen is the government stepping in to cover the borrower's £200,000 shortfall directly, or the borrower's obligation to repay it simply disappearing. The guarantee changes who absorbs the lender's loss on the unrecovered balance; it does not touch what the borrower owed in the first place.

Personal guarantees and your home

Whether you'll be asked for a personal guarantee depends heavily on which lender you approach. Barclays and Santander both describe personal guarantees as taken at the lender's own discretion, in line with normal commercial lending practices — implying it's assessed case by case, not automatic. Funding Circle takes the opposite position outright: it asks for a personal guarantee on all of its loans, including GGS loans, as standard practice. HSBC sits in between, reviewing security requirements individually rather than applying a blanket rule.

The one point every lender agrees on, without exception, is the floor on what a personal guarantee can reach. Barclays, Funding Circle, HSBC, Virgin Money and Santander all confirm that a Principal Private Residence — your or your guarantor's main home — cannot be taken as security under the scheme, regardless of the size of the loan. If you're weighing up a personal guarantee request from any accredited lender, our guide to personal guarantees: what you are signing covers what else typically sits inside one, beyond the home carve-out this scheme guarantees you.

What it actually costs

There's no fee charged to the borrower for the government guarantee itself — HSBC is explicit about that. What you will typically pay is a loan arrangement fee: HSBC charges 1.5% of the facility amount for GGS loans between £25,001 and £299,999, negotiable above that threshold. Separately, Barclays notes that its overall pricing takes into account both the benefit of the government guarantee and a fee that is charged to the lender for providing it — in other words, the guarantee isn't free to the lender either, and that cost is built into what you're quoted rather than disclosed as a separate line.

No published rate card gives an actual interest rate or APR for a GGS facility — every lender describes pricing as varying by individual proposal. Get quotes from more than one accredited lender before committing, since the guarantee's benefit and the lender's own margin are both baked into a single negotiated number.

HSBC does offer one concrete flexibility worth knowing about: capital repayment holidays of up to 24 months throughout the life of a GGS loan from drawdown, subject to status. Take one, and repayments will be higher and more interest payable for the remainder of the term — a genuine trade-off, not a free pause.

One more constraint sits underneath all of this: GGS assistance is treated as a subsidy deemed to benefit the borrower, and there's a cap on the total subsidy a borrower and its wider business group can receive over any rolling three-year period. None of the accredited lenders here publish the actual monetary cap, and any subsidy you've already received — including from an earlier BBLS, CBILS, CLBILS or RLS facility — can reduce how much you're able to borrow now. If your business has used any of those earlier Covid-era schemes, raise that history with your lender at the outset rather than finding out mid-application that it's capped your headroom.

Applying, and what changed in July 2026

GGS is only available through the British Business Bank's accredited lenders, listed on its own GGS accredited lenders page — there's no route to the guarantee that bypasses an accredited lender's own credit assessment. HSBC's own page states the scheme will be available until 31 March 2030.

A government announcement on 13 July 2026 proposed a significant expansion: an additional £2 billion of SME lending per year by 2028/29, taking total supported lending from £1.35 billion to £3.35 billion a year; raising the maximum term from six to ten years for loans up to £1.1 million; and raising the eligible turnover threshold from £45 million to £54 million. The government estimates this would support an extra 12,000 businesses a year by 2028/29 — a 150% increase on the roughly 8,000 currently supported, taking the total to around 20,000 — and puts the wider multiplier effect at roughly £10 of bank lending for every £1 the scheme spends.

The scheme page on gov.uk still shows the £45 million turnover cap, and does not yet mention the £54 million threshold, the ten-year term or the £3.35 billion annual target. If you're applying close to this window, ask your accredited lender directly which set of terms currently applies to your facility rather than assuming the expanded numbers are already in force.

Frequently Asked Questions

Does the government pay my loan back if my business fails? No. The 70% guarantee sits with the lender, not you, and only pays out after the lender has already pursued you and any security or guarantee for the full amount. You remain 100% liable for the debt throughout.

Will I definitely be asked for a personal guarantee? It depends entirely on which accredited lender you approach. Funding Circle takes one as standard on every GGS loan; Barclays and Santander treat it as discretionary. Either way, no lender can take your main home as security under the scheme.

Can GGS fund an overdraft or invoice finance facility, not just a loan? Yes. The scheme covers term loans, overdrafts, asset finance, invoice finance and asset-based lending — the right product depends on what you're actually funding, not a single fixed loan format.

How much can I borrow? Up to £2 million per business group outside the Northern Ireland Protocol scheme-wide, though individual lenders set narrower ranges within that — Funding Circle tops out at £250,000, for instance, while HSBC goes up to the full £2 million.

Is the scheme still open? Yes — HSBC states it runs until 31 March 2030, and a July 2026 government announcement proposed expanding it further. Confirm the exact terms in force with your accredited lender at the time you apply; the scheme page on gov.uk still shows the £45 million cap.

Deplexifi works UK businesses through which accredited lender, and which GGS-backed facility, actually fits a real funding need — talk to us before you approach a lender directly.

The 70% government guarantee protects the lender, not the borrower — it pays out only after the lender has exhausted normal recovery against you and any security or personal guarantee, and you remain 100% liable for the debt regardless of the guarantee

Nothing here is regulated financial advice. Deplexifi arranges commercial finance for businesses — this article describes general lending practice and the published position of the sources listed below, not a recommendation for any individual business.