“Government-backed” makes the Growth Guarantee Scheme sound like cheap money or a safety net. It is neither. A GGS facility is an ordinary loan from an ordinary bank, and you repay every penny of it. The only thing the government does is promise the lender it will cover most of the loss if you default, and only after the bank has chased you for the money first. That promise can get you a loan you would otherwise be refused. It does not make the loan cheaper, and it does not protect you.
The scheme is run by the British Business Bank, it replaced the Recovery Loan Scheme, and in the 2025 Spending Review it was extended to 31 March 2030 (British Business Bank). So it is open, and likely to stay open. Here is what it actually changes for a small business, and when it is worth applying.
The guarantee is for the bank, not you
The number everyone quotes is 70%. It is real, but it does not mean what most people hope. The government guarantees the lender 70% of the outstanding balance, and only after the lender has finished its normal recovery process (British Business Bank). You remain 100% liable for the debt.
Work it through. Borrow £100,000, repay £40,000, then default. The bank pursues you for the remaining £60,000 through its usual route, including calling on any personal guarantee you signed. Only once that is exhausted can it claim 70% of what it could not recover, from the government. None of that 70% comes off your bill. The guarantee sits behind the lender to make it braver about lending. It is not a parachute for the borrower.
It is a commercial loan, priced like one
The government does not set the rate, and GGS is not a discount product. Pricing is the lender’s, and it varies by loan size, term, security and how strong your application is. At Santander, the rate is your agreed margin plus the Bank of England base rate, and it rises when the base rate does (Santander). Lenders are expected to reflect the benefit of the guarantee in what they charge (NatWest), but “reflected” is not the same as “cheap”.
There is usually an arrangement fee on top. HSBC, which publishes its fees, charges 1.5% of the loan for facilities between £25,001 and £299,999, and makes it negotiable between £300,000 and £2 million (HSBC). On a £100,000 loan that is £1,500 before you have paid a penny of interest. You pay no fee for the guarantee itself, but you do pay to arrange the loan.
So the honest comparison is not “GGS versus a normal loan”. If a bank will already lend to you commercially on equal or better terms, take that. GGS earns its place when the alternative is no, or worse terms.
When it is worth applying
The scheme is built for a viable business that normal lending struggles to reach: you are growing faster than cash allows, you lack the security a bank wants, or you need more than its usual appetite. The core eligibility is straightforward (British Business Bank):
- Turnover up to £45 million across your business group.
- Trading in the UK, with most of your income from trading.
- A viable proposition you can afford to repay.
- Not a business in difficulty or in insolvency proceedings.
You cannot apply through the government. There is no gov.uk form. GGS is delivered only through accredited lenders, and the British Business Bank publishes the list. Start with your own bank, then compare others, because a no from one is not a no from all: appetite, products and sector preferences differ. Facilities run from £25,001 for a term loan or overdraft up to £2 million per group, or £1 million for Northern Ireland Protocol borrowers.
If you took a Bounce Back or CBILS loan
A Covid-era loan does not shut you out. Lloyds confirms that CBILS, CLBILS, Bounce Back or Recovery Loan borrowing taken before 30 June 2024 does not prevent a GGS application, though it can reduce the maximum you are allowed (Lloyds). The scheme also counts as a subsidy, so previous government-backed support is totted up against a limit. If you are still repaying a Bounce Back Loan, expect that to shrink your headroom, and be ready to show how new borrowing strengthens the business rather than just stacking on top of the old debt.
Your home is safe, a personal guarantee may not be
One genuine protection: your principal private residence cannot be taken as security under the scheme, at any lender (British Business Bank). That is a real line in the sand, and the same at Lloyds, NatWest, Santander and HSBC.
It is not the whole story. Lenders can still ask for a personal guarantee at their discretion, and most say so plainly. A personal guarantee puts your other personal assets on the line if the business cannot pay. If a lender asks for one, that is the moment to take independent advice, before you sign rather than after.
The bottom line
Treat the Growth Guarantee Scheme as what it is: a way to get a normal business loan approved when you might otherwise be turned down, in exchange for the usual rate, the usual fee, and full liability. If your bank will already lend to you on good terms, you may not need it. If it will not, GGS could be the difference between funding and a flat no, as long as the repayments genuinely work. Before you apply, run the numbers as you would for any loan: the arrangement fee, a rate that can climb with the base rate, and what the monthly payment does to your cashflow if next quarter is slow.
