Growth Guarantee Scheme
Government-Backed Business Loans
Government-backed business loans are loans from accredited lenders where the government guarantees part of the lender's risk. In the UK, the main scheme is the Growth Guarantee Scheme (GGS), run by the British Business Bank, which gives lenders a 70% guarantee on eligible facilities up to £2 million.
Funding Plus works with accredited GGS lenders and can tell you whether a government-backed facility could improve the terms you're offered.
- Facilities up to £2m
- Loans, overdrafts, asset and invoice finance
- Accredited lenders only
Reviewed by the Funding Plus team · Last updated October 2026
Step 1 of 3 · Government-Backed Business Loans
How much do you need?
Takes about a minute. No impact on your credit score.
Government-Backed Business Loans at a Glance
- Amounts
- Up to £2m
- Terms
- Up to 10 years
- Guarantee
- 70% to the lender
- Your liability
- 100% of the debt
- Best for
- Viable SMEs
Typical figures across the market. Your offers depend on your business, the lender and the security available.
How Government-Backed Business Loans Work
- 1Check you're eligibleUK-based trading business within the turnover limit and able to show the business is viable.
- 2Apply through an accredited lenderYou don't apply to the government. The lender decides whether to use the scheme.
- 3Lender assesses as normalThe usual credit checks apply. The guarantee doesn't guarantee approval.
- 4Facility agreedThe lender tells you the facility is supported by the scheme and sets the terms.
How Much Do Government-Backed Business Loans Cost?
The lender sets the interest rate and fees, as with any loan. The guarantee lowers the lender's risk, which can mean approval where you'd otherwise be declined, or better terms. Personal guarantees may still be taken, but your main home can't be used as security under the scheme.
- Interest and fees set by the lender
- The government guarantee protects the lender, not you
- Personal guarantees may still be required
- Your main home can't be taken as security under the scheme
Worked example
A £150,000 GGS loan over 5 years
- Loan amount
- £150,000
- Interest rate
- 9% a year
- Monthly repayment
- £3,113.75
- Total interest
- £36,825
- Total repayable
- £186,825
Illustrative only, not a quote. The rate is set by the lender. Check scheme details with the British Business Bank.
Who Can Get Government-Backed Business Loans?
- A UK-based business carrying out trading activity
- Turnover within the scheme limit (raised to £54m in July 2026)
- A viable business proposition, as judged by the lender
- Facility used for business purposes
- Some sectors are excluded under subsidy rules
What You'll Need to Apply
- Latest accounts and management accounts
- Business plan or explanation of the funding purpose
- Cash flow forecast
- Recent business bank statements
Pros and Cons of Government-Backed Business Loans
Advantages
- Can unlock funding a lender would otherwise decline
- Covers several types of facility, not only loans
- Larger amounts than many unsecured loans
- Main home protected from being taken as security
Things to watch
- You remain 100% liable for the debt
- Lenders still apply their normal checks
- Only accredited lenders can offer it
- Rates aren't fixed by the government
What the Scheme Covers
Government-Backed Business Loans vs Other Options
| Option | Best for | Typical speed | Security |
|---|---|---|---|
| Government-backed loan | Viable SMEs short of security | 2 – 6 weeks | May be taken (not main home) |
| Unsecured business loan | Fast funding without security | 1 – 5 days | None (guarantee usual) |
| Secured business loan | Property owners | 2 – 6 weeks | Property |
| Start-up loan | Very new businesses | 1 – 4 weeks | None |
Who Uses Government-Backed Business Loans?
The scheme is open to most sectors, subject to subsidy rules.
Customer story
“[Real customer story for Government-Backed Business Loans: what they needed, how quickly it was arranged and what it let them do.]”
[Name], [Role], [Business name] · [Amount] government-backed loan
Government-Backed Business Loans FAQs
What is the Growth Guarantee Scheme?
A government scheme run by the British Business Bank that gives accredited lenders a 70% guarantee on eligible facilities, to encourage lending to smaller businesses.
Does the guarantee mean I don't have to repay?
No. The guarantee protects the lender. You're responsible for 100% of the debt, just like any other loan.
How do I apply?
Through an accredited lender. Funding Plus can introduce you to lenders on our panel that offer GGS facilities.
What changed in 2026?
In July 2026 the government announced an expansion, including a higher turnover limit and longer maximum terms on smaller loans. Check the latest details with the British Business Bank.
Can a start-up use the scheme?
Possibly, if the lender judges the business viable. Very new businesses may find the Start Up Loans scheme easier.
Related Guides
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