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Line of growth | AccountingWEB | Details emerge on Growth Guarantee Scheme

Loan scheme aims to help 11,000 small businesses


The British Business Bank has shed light on the key elements of the new Growth Guarantee Scheme, which is expected to support about 11,000 smaller UK businesses.

10th Jul 2024
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Fresh details have emerged on the successor to the Recovery Loan Scheme, while new plans to “align key institutions” under the National Wealth Fund have also been revealed, with both ventures designed to boost growth.

The Growth Guarantee Scheme is expected to support about 11,000 smaller UK businesses between 1 July 2024 and 31 March 2026, with the British Business Bank having accredited 41 lenders.

Each of these will be tasked with putting in place the operations required to start lending, with 20 having confirmed that they are open for applications and more currently going through the accreditation process.

Continuity and consistency

The terms of the Growth Guarantee Scheme are intended to remain broadly unchanged from its predecessor in a bid to ensure continuity and consistency for both those lending and the wider business community.

The terms include up to £2m being available per business group, with term loans and asset finance facilities being available from three months up to six years.

Meanwhile, businesses that took out a Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) or a Recovery Loan Scheme (RLS) facility before 30 June 2024 are not prevented from accessing the Growth Guarantee Scheme but the British Business Bank has warned that borrowing under these ventures “may reduce the maximum amount the borrower is eligible for”.

Sustainable growth

Reinald de Monchy, managing director of guarantee and wholesale solutions at British Business Bank, hopes the Growth Guarantee Scheme will “help to generate more sustainable growth across the UK and provide a springboard to many smaller businesses to scale up or stay ahead”.

A British Business Bank spokesperson told AccountingWEB: “The predecessor, the Recovery Loan Scheme, was due to finish lending at the end of June, and it was necessary to consider the best way to support the market. The Growth Guarantee Scheme gives assurance to businesses and the market that they will be supported until the end of the next financial year.

“We believe, based on the momentum of the Recovery Loan Scheme, that the Growth Guarantee Scheme will be successfully taken up by borrowers who will be able to access a diverse range of finance types.

“This will support smaller businesses across the nations and regions of the UK.”

National Wealth Fund

The British Business Bank is also involved in Chancellor Rachel Reeves’s plan to boost the new National Wealth Fund.

Reeves, alongside business secretary Jonathan Reynolds, has instructed officials to begin work to align the UK Infrastructure Bank and the British Business Bank. The new initiative is designed to “mobilise billions more in private investment and generate a return for taxpayers”, with £7.3bn of additional funding being allocated through the UK Infrastructure Bank.

Elsewhere, reforms will be made to the British Business Bank, whose chief executive Louis Taylor said: “Key institutions, including the British Business Bank and the UK Infrastructure Bank, will become aligned under the new National Wealth Fund to invest in the new industries of the future, supporting the government’s new industrial strategy.

“We expect the National Wealth Fund to create a single coherent governmental offer for businesses and a compelling proposition for investors that will help mobilise billions more in private investment in line with a lot of our recent work, enabling us to catalyse external institutional capital, including pension fund investment, into UK high-potential companies, by leveraging the British Business Bank’s scale, networks and track record.”

Reeves has tasked the Treasury to engage with industry, government departments and the UK’s public finance institutions to get the ball rolling.

Replies (6)

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By FactChecker
10th Jul 2024 18:19

Are there any statistics regarding the last 5 years of CBILS, CLBILS, BBLS and RLS loans?

As in:
- % defaulted
- % in 'special measures'
- % repaid
- % converted into bigger loans

What happened to metrics and reviewing the data *before* rushing into another political big idea?
Looks like Reeves is truly going to be "Meet the new boss, Same as the old boss" ... oh dear!

Thanks (5)
Replying to FactChecker:
12th Jul 2024 17:10

Fear not, pre-election Labour promised that they wolud go after anyone who fraudulently claimed Covid loans.

They still will, right?

Thanks (0)
Rob Swan
By Rob Swan
12th Jul 2024 08:54

Is not the British Business Bank one huge financial 'sink hole' which swallows up most of what (public money) gets thrown into it, never to be seen again and with little benefit to the economy?

So, the obvious thing.... Dig a bigger hole.

Any (new) government which 'hits the ground running' is - as FactChecker highlights - failing to take stock of the situation before making 'SENSIBLE' decisions.

My personal experience of government funded small business support - and I've had plenty - is... doubtful at best. The headlines sound good to those who've never run a business, but...

If you know, you know.
If you don't... get some experience first, or at least get the facts.

Thanks (0)
By moneymanager
12th Jul 2024 09:36

"Bounce Back" loans were given to the entertainment sector who restocked with perishables TWICE on the promise of reopening and were TWICE prevented from doing that on the basis of completely spurious 'science' like, i.e. the destruction of private working capital and, with the catastrophic rate of total closure in the inevitable 'cost of living crisis' resulting from government's fiscal incontinence and restrictions on energy, a permanent increase of the national debt.

Thanks (1)
By sherodwilliams
12th Jul 2024 11:36

Factchecker is of course correct in asking for the metrics & indeed lessons learned from any of the Covid Support loan packages. The fact is that the new broom has no due diligence results to consider but an expectant electorate to please. More & more soundbytes such as "Change", Delivery at pace" & "need to get things done". The new broom however seems to be sweeping the problem under the carpet and like many previous Labour Governments, pretending that they are starting with a blank sheet of paper because " whatever historical problems we face they are not of our making" Having a newly aligned central business finance house will only provide a form of ( probably very poor) oversight of the 40+ banks & finance providers involved. We already know that oversight of the Bounce Back Scheme was microscopic & hence the raft of liquidations which followed. Directors of SME's who took huge sums across numerous companies but drew the cash out never to be seen again. The best case I have seen was a group of companies in which every company caimed a BBL, they claimed furlough support for a large number of staff but HMRC never received any PAYE or NIC for almost 3 years running up a debt of >400k. There was no oversight until a liquidator undertook an investigation too late in the day. If the 41+ funders in a scheme are not capable of properly monitoring their lending then what the hell are they doing? It doesn't need a tier of highly paid, part time , probably ex-city bankers to mop up a tranche of money for the privelege of signing off reports which they don't understand. Perhaps the next idea will be a Money Tsar? ( A term introduced during the Blair Government)

Thanks (1)
Replying to sherodwilliams:
Rob Swan
By Rob Swan
12th Jul 2024 13:21

'Money Tsar'!!!

Nailed it sherodwilliams ;)
We heard it here first.

Anyone care to offer odds on favorites?

Thanks (0)