The British Business Bank’s Growth Guarantee Scheme has been granted an additional £500m in lending capacity, the Chancellor announced today, in a move aimed at supporting smaller UK businesses facing cashflow difficulties caused by global tariff changes.

The additional finance, delivered through the Bank’s existing network of around 50 accredited lenders, is expected to provide vital liquidity to businesses struggling with new import and export costs following adjustments to international trade arrangements. The scheme, which offers lenders a 70% government-backed guarantee on eligible loans, has already supported £2.1bn in lending through more than 13,000 facilities.

The Growth Guarantee Scheme is intended to help viable businesses access finance they might otherwise struggle to obtain during periods of economic uncertainty. Loans of up to £2m per business group are available in most cases, with a reduced cap of £1m applying to companies affected by the Northern Ireland Protocol.

IMPORTANT & NECESSARY

Reinald de Monchy, co-chief banking officer at the British Business Bank, said: “The Growth Guarantee Scheme and its predecessors have proven themselves to be an important means of supporting smaller UK businesses over the last forty years. The Growth Guarantee Scheme can be used counter-cyclically, enabling smaller businesses to obtain funding during times of uncertainty such as we are experiencing currently. It is therefore important and necessary to see additional capacity made available to support smaller UK businesses at this time.”

The new tranche of funding will be available through term loans, overdrafts and other finance products intended to assist with cashflow and working capital requirements. Businesses can apply through any of the British Business Bank’s accredited lenders, with applications assessed at the discretion of the lender under their normal credit and fraud checks.

The additional support follows the government’s commitment in the Autumn Budget 2024 to allocate more than £1bn to the British Business Bank for the 2025/26 fiscal year. This includes further investment in the ENABLE Build programme for smaller housebuilders, the Start Up Loans scheme, and equity funding programmes for high-growth and life sciences firms.

While the 70% guarantee applies to the lender rather than the borrower, businesses remain fully liable for the loan and must be able to demonstrate the ability to repay. Interest rates and fees will vary between lenders, taking into account the cost of the guarantee and the overall risk profile.

Firms affected by recent global tariff changes are encouraged to contact their bank or other participating lenders to explore options under the Growth Guarantee Scheme. A full list of accredited lenders is available via the British Business Bank’s website.