BBB’s Growth Guarantee Scheme passes £250m lending milestone
The British Business Bank’s (BBB) Growth Guarantee Scheme has lent more than £250m of finance to small businesses since it launched in July.
The Growth Guarantee Scheme is a successor to the Recovery Loan Scheme and is designed to support access to finance for smaller businesses across the UK, with two thirds of facilities being provided outside of London and the South-East.
Working with 50 accredited lenders, the government-backed guarantee scheme works with a wide range of financial products, including term loans, overdrafts, asset finance, invoice finance and asset-based lending.
The scheme provides lenders with a 70 per cent government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery processes. The borrower always remains 100 per cent liable for the debt.
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The wholesale and retail sector has been provided the highest proportion of facilities, at 17 per cent of the total. This was followed by manufacturing at 15 per cent, while construction, and professional and scientific, accounted for 12 per cent and nine per cent respectively.
Most of the facilities (96 per cent) have been provided to businesses with fewer than 50 employees, with this finance used for growth, including asset finance, capital expenditure, start up and working capital.
A quarter of the total lending from the Growth Guarantee Scheme has been provided under asset finance, reflecting the growth of asset finance as a finance option for businesses.
“This is a fantastic achievement for the Growth Guarantee Scheme in such a short amount of time,” said British Business Bank co-chief banking officer, products, Reinald de Monchy. “Since its launch, we wanted to maintain the momentum we generated with the previous scheme and offer a diverse range of finance types across the UK. We hope to continue this into 2025 and support more smaller businesses as the scheme accredits more delivery partners.”
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Federation of Small Businesses (FSB) national chair Martin McTague added: “FSB campaigned hard to secure the Growth Guarantee Scheme as a crucial successor to the Recovery Loan Scheme, and we are delighted to see it has delivered £250m of funding to small businesses since its launch. We’re excited to see what the future holds and look forward to many more small businesses being enabled to scale up by the scheme, helping to fuel economic growth and recovery across the UK.”
The Growth Guarantee Scheme is expected to support around 11,000 smaller businesses between 1 July 2024 and 31 March 2026.
BBB administers the Growth Guarantee Scheme on behalf of the Secretary of State for Business and Trade.
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