What’s beyond RLS - The Growth Guarantee Scheme

SMEs are the backbone of the UK Economy, making up 99.9 per cent of businesses and supporting 27 million jobs, accounting for £4.5tr of annual turnover. 

However, since Covid-19, these vital enterprises seem to have been largely forgotten by our politicians. In early 2024, in a bid to boost small firms across the UK, the government introduced several measures which include a rebranded and extended Recovery Loan Scheme.

The Recovery Loan Scheme (RLS) was originally set up to support the UK’s SMEs during the early post pandemic period with government-backed lending, it was the successor to CBILS (The Coronavirus Business Interruption Loan Scheme) which was introduced at the height of the pandemic to provide financial support for businesses. Now, we have the third iteration of the scheme, and it has a new name – the GGS – but the terms remain broadly unchanged!

The GGS aims to improve the loan terms available to UK businesses, however, those terms reflect the protection provided by a 70 per cent government guarantee offers to lenders, often resulting in higher interest rates. Essentially, the government underwrites 70 per cent of what the lender could lose if a business defaults. Businesses are still liable for 100 per cent of the borrowing.

Businesses can apply for lending under GGS directly through a number of accredited lenders which can be found on the British Business Bank (BBB) website, or with the help of a trust advisor like the Banking & Finance Team at MHA .

Please note that this scheme exists to support businesses who might not meet a lender’s usual lending criteria. Some businesses might find commercial loans with better terms; interestingly, if a lender can offer finance on normal commercial terms without the need to make use of the scheme, it is expected do so.