The UK Government launched the Growth Guarantee Scheme (GGS) on July 1, 2024, as an extension and evolution of the previous Recovery Loan Scheme (RLS). This initiative is designed to support small and medium-sized enterprises (SMEs) by improving their access to finance during challenging economic times.

Key Features of the Growth Guarantee Scheme:

1. Loan Guarantees: The government guarantees 70% of the loan amount to lenders, reducing their risk and encouraging them to provide finance to SMEs. This guarantee applies to loans up to £2 million for businesses in Great Britain and up to £1 million for businesses in Northern Ireland.

2. Eligible Financial Products: The scheme covers a variety of financial products including:
o Loans and overdrafts (from £25,001 to £2 million)
o Invoice finance and asset finance (from £1,000 to £2 million)

3. Eligibility Criteria:
o Businesses must have a turnover of less than £45 million.
o They must have been trading in the UK for at least two years.
o Over 50% of their turnover must come from trading activities, unless they are a registered charity or further education institution.
o Businesses should not be involved in insolvency proceedings and must use the loan for business purposes such as working capital or investment.

4. Application Process: Contact Oxygen Business Finance who will discuss your requirements and look to approach appropriate funders. Access to GGS is through accredited lenders, which include banks and specialist finance houses. The scheme is designed to come into play if a lender deems the business’s loan application too risky under normal circumstances.

5. Repayment Terms: Loans and asset finance can have terms up to six years, while overdrafts and invoice finance can have terms up to three years. Interest rates are typically higher due to the increased risk for lenders, despite the government guarantee.

6. Protection for Personal Assets: One significant benefit for business owners is that their principal private residences (main family homes) cannot be taken as security under this scheme. However, directors may need to give personal guarantees.

How does the Recovery Loan Scheme work if you use Oxygen Business Finance?

Once the lenders we work with are approved, we are very quickly making sure our own accreditation with each lender is in place, so that we are ready to help clients quickly who need loans and asset or equipment finance for their businesses.

It’s worth noting that each accredited lender will have their own Government Guarantee Scheme (GGS ) qualifying criteria, so whilst Oxygen Business Finance as a broker has access to a substantial panel of lenders, we won’t be working with all those that are participating in the scheme. Our focus is to work with lenders that have been individually accredited for equipment finance, invoice finance and business loans.

If you think your business has a requirement to borrow money to finance additional equipment or machinery purchases or you want to raise extra working capital, help could be available in the form of the Growth Guarantee Scheme.

How can Oxygen help if you need additional cash for your business?

We have already successfully helped numerous companies to secure additional funding through Coronavirus Business Loans & Recovery Loans.
The Government Guarantee Scheme (GGS ) is there to assist businesses looking to expand and invest whilst providing additional comfort to a lender, when the application is considered too risky under normal circumstances.

To see how we may be able to help your business grow, please contact the Oxygen team on 01635 785 400