Understanding the Growth Guarantee Scheme

The Growth Guarantee Scheme provides government-backed loans to eligible UK businesses, helping them obtain funding to support growth initiatives. While the government guarantees part of the loan, final approval rests with the lender. Lenders carry out standard credit and fraud checks and must offer alternative commercial loan options if they provide better terms for the business.

Typical uses for GGS-backed loans include:

• Purchasing or upgrading equipment and vehicles
• Expanding operational capacity or premises
• Investing in technology or infrastructure
• Supporting working capital needs to facilitate growth

Eligibility Criteria

To qualify for a Growth Guarantee Scheme loan, businesses must meet specific criteria:

• Be based in the UK with an annual turnover of less than £45 million
• Have a viable and demonstrable business proposition
• Generate more than 50% of revenue through trading activities
• Not be in financial difficulty, including insolvency or administration proceedings
• Provide written confirmation that receiving the GGS loan will not exceed maximum government subsidy limits
• Previous recipients of the Recovery Loan Scheme (RLS) or Bounce Back Loan Scheme (BBLS) can still apply, although their borrowing potential may be reduced

Application Requirements

Applying for a GGS-backed loan requires the following documentation, submitted to an accredited lender:

• Basic business information, including age of the business and annual revenue
• Detailed business plan outlining growth strategy
• Information on directors and shareholders
• Bank statements covering the past 12 months
• Confirmation that the requested funding is within allowable government subsidy limits

Gable Business Finance supports businesses in compiling these documents, presenting applications to accredited lenders, and securing funding efficiently.

Asset Finance and GGS-Backed Loans

Asset finance is an effective complement to GGS loans, enabling businesses to acquire vehicles, machinery, or equipment without a large upfront capital outlay.
This approach allows companies to spread the cost of assets over time, maintaining operational liquidity while investing in growth.

Common applications include:

• Acquiring delivery vehicles or fleet expansion
• Investing in production or packaging machinery
• Upgrading IT infrastructure or software systems
• Refurbishing or expanding commercial premises

Example Case Study: Indian Food Wholesaler

A UK-based Indian food wholesaler wanted to expand its distribution network and purchase new refrigerated vehicles to improve delivery efficiency.
Working with Gable Business Finance, the company applied for a £250,000 GGS-backed loan.
The funds were allocated to purchasing a fleet of refrigerated vans, upgrading warehouse storage and refrigeration equipment, and investing in logistics software.

As a result, the business increased delivery capacity, reduced spoilage, and secured new retail contracts, while the flexible repayment terms aligned with seasonal revenue fluctuations.

Sector-Specific Examples

GGS-backed loans and asset finance can support a wide range of industries. Here are some sector-specific applications:

1. Retail and Wholesale

Retailers and wholesalers often need working capital to manage inventory and expand premises.
For example, a regional grocery wholesaler might use a £150,000 GGS loan to acquire additional storage space and refrigeration units, enabling larger purchase volumes and improving product availability.

2. Manufacturing

Manufacturing businesses can leverage GGS loans to invest in machinery or automation technology.
A small furniture manufacturer could use £300,000 to purchase advanced woodworking machinery, improving production efficiency, reducing lead times, and increasing output.

3. Hospitality and Catering

Hotels, restaurants, and catering services can benefit from financing for kitchen equipment, vehicles, and refurbishment.
For instance, a catering company may use £200,000 in GGS-backed finance to expand its vehicle fleet and purchase commercial ovens, supporting larger event contracts and improved service delivery.

4. Transport and Logistics

Logistics and delivery firms often require vehicle investment.
A courier company could secure a £180,000 GGS loan to expand its van fleet, implement route planning software, and hire additional drivers, enabling quicker deliveries and growth in service capacity.

5. Construction and Trades

Construction businesses can use funding to acquire tools, machinery, or vehicles.
For example, a small civil engineering firm might take out £250,000 to purchase excavators, trucks, and other essential equipment, allowing it to take on larger projects and increase workforce productivity.

6. Technology and IT Services

Technology companies can allocate GGS loans to software development, hardware upgrades, and data centre expansion.
A mid-sized IT services provider might invest £150,000 to enhance cloud infrastructure and cybersecurity systems, improving service delivery to clients.

7. Healthcare and Care Services

Care providers can use funding to purchase specialised vehicles or equipment.
For example, a mobile care company may invest £100,000 in wheelchair-accessible vans and monitoring equipment, expanding its service area and client capacity.

Benefits of GGS Loans and Asset Finance

• Government-backed security: Partial government guarantees allow lenders to provide finance to more businesses.
• Flexible repayment options: Tailored repayment schedules, including interest-only periods, accommodate business cash flow.
• Growth-oriented: Funding can be used to expand operations, acquire assets, and increase revenue potential.
• Accessible for smaller businesses: Turnover under £45 million can access competitive lending options.
• Combine with asset finance: Spread the cost of equipment and vehicles over time while funding expansion projects.
• Continuity for previous scheme recipients: Businesses that previously received RLS or BBLS funding may still apply.

Frequently Asked Questions (FAQ)

Q: What is the Growth Guarantee Scheme?

A: The Growth Guarantee Scheme is a UK government-backed loan initiative that helps businesses access finance to grow operations, acquire assets, or invest in infrastructure.

Q: Who is eligible for a GGS-backed loan?

A: UK-based businesses with turnover under £45 million, trading income over 50% of total revenue, not in financial difficulty, and with a viable business plan can apply.

Q: Can businesses that previously received RLS or BBLS funding apply?

A: Yes. Businesses that received RLS or BBLS loans before 30 June 2024 can apply, though maximum borrowing limits may be reduced.

Q: How do I apply?

A: Applications must be submitted via an accredited lender. You’ll need to provide business information, a detailed business plan, bank statements, and confirmation of subsidy limits.

Q: What can the funds be used for?

A: Funds can be used to purchase equipment, vehicles, or premises, invest in technology, or support working capital to facilitate business growth.

Q: Are there flexible repayment options?

A: Yes. Lenders can structure repayment schedules to align with business cash flow, and interest-only periods may be available.

Q: Can I combine GGS loans with asset finance?

A: Absolutely. Asset finance allows businesses to spread the cost of vehicles, machinery, or equipment while simultaneously funding other growth initiatives.

Q: Is approval guaranteed?

A: No. Approval is at the discretion of the lender. Standard credit and fraud checks apply, and if a traditional commercial loan offers better terms, it must be offered instead.