Following the first anniversary of the Growth Guarantee Scheme (GGS), it’s worth reflecting both on what a useful tool it can be in the arsenal of commercial lending brokers, and clearing up some misapprehensions that have seen it less frequently used than its predecessors.
The GGS is the successor scheme to the Recovery Loan Scheme (RLS), and is designed to help small and medium-sized businesses to access the funding they need in order to successfully grow.
The scheme allows eligible businesses to borrow up to £2m, over terms stretching from three months to six years. The funds raised can be used in a variety of different ways, such as refinance existing debt from another lender, for cash flow purposes, or for purchasing a property which the business will occupy, such as a warehouse or retail unit.
The scheme provides the lender with a 70% government-backed guarantee against the outstanding balance of the loan, with the idea that this will ensure business borrowers can obtain better terms than without it. However, it’s important to note that lenders can go further than the scheme’s parameters – at Atom bank for example, if we can offer a standard commercial loan on better terms than under GGS, then we will do so.
To be eligible, businesses must not have a turnover of more than £45m, be carrying out trading activity in the UK and not be a “business in difficulty”.
It’s a highly valued scheme, picking up some of the slack following the close of the RLS which served such a crucial role in the aftermath of the pandemic. Atom bank was a significant player in the RLS, providing more than £240m in funding, so we understand better than most how effective such programmes can be in supporting small businesses. It’s why we were so determined to gain accreditation for this successor scheme, and continue working alongside small businesses with growth ambitions.
THE GGS IN ACTION
We have had a host of cases recently which highlight how impactful the Growth Guarantee Scheme can be for eligible businesses, often at the extremities of a lender’s risk appetite including those involved in food and hospitality.
For example, we recently helped a borrower – the sitting tenant of a bistro pub in the Midlands – to purchase the freehold of the premises from the brewery.
It was the sort of opportunity that doesn’t come around all that often, and the buyer would be free to make improvements to the premises as they pleased. And while they didn’t have a cash deposit, Atom bank was able to consider the ‘goodwill’ of the business, and offer a £663,000 loan.
Between our approach to goodwill, and the benefits provided by the GGS, the buyer was able to move forward with a purchase that allows them to grow the business substantially. Without such schemes in place, and without lenders who embrace such a flexible way of working, then businesses might not feel able to follow their ambitions.
THE POSITIVE PATH AHEAD
What’s clear is that plenty of businesses do feel confident about their prospects, and are open to making use of external funding in order to progress.
We carry out a quarterly poll of commercial brokers, to get their insights into how their business clients are feeling, and the latest edition – covering Q1 of 2025 – is really encouraging.
More than half of advisers were seeing increased appetite from their clients for borrowing, with a tiny proportion seeing a declined level of demand.
And that desire is being driven largely by the appealing cost of borrowing, with 57% of advisers pointing to the lower interest rates on offer, while around one in three noted both improved business confidence and a greater appetite from lenders.
After the trials and tribulations of recent years, and while things may still be far from plain sailing, this suggests that businesses feel they have laid the right foundations, got the right plans in place, and are ready to take the next step. Initiatives like the GGS clearly have a big role to play in helping them do just that.
WHAT THE FUTURE HOLDS
The GGS has enjoyed a positive first year, and the Chancellor has announced the scheme will provide approximately £500m of additional lending capacity to help more smaller businesses across the UK. The extra funding is aimed at smaller businesses that may need support with cashflow issues due to changes in global tariff rates. A host of businesses across all sorts of different industries are benefiting from the funding support they need in order to push on with their plans.
It won’t be around forever however, with the scheme currently due to conclude at the end of March 2026. While there is plenty of time before this deadline, it’s important for brokers to ensure their business clients are aware that such schemes are not a given and there is no certainty that comparable schemes will be available in the future.
Irrespective of such schemes, brokers also need to pinpoint the lenders most committed to delivering for small business clients, and who focus on providing funding facilities that meet the individual needs of borrowers rather than an ‘off the peg’ solution.
