The British Business Bank is set to introduce the ‘Growth Guarantee Scheme’ aimed at helping smaller businesses in the UK secure financing for their investment and expansion needs.  

Set to commence on 8 July, the initiative is anticipated to assist approximately 11,000 smaller businesses from 1 July 2024 to 31 March 2026. 

So far, 41 lenders have received accreditation to participate in the Growth Guarantee Scheme.  

These lenders are in the process of establishing the necessary operational frameworks to begin lending under the scheme, the company said.  

Once ready, they will be featured on British Business Bank’s website, where they will start accepting applications.  

Currently, 20 lenders have confirmed their readiness to accept applications, the bank added. 

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Additional lenders are undergoing the accreditation process and are expected to receive accreditation in the forthcoming weeks.  

All these lenders will offer multiple financing options, such as overdrafts, asset finance, term loans, asset-based lending (ABL), and invoice finance, to smaller businesses.  

British Business Bank stated that the terms of the new scheme are designed to be broadly consistent with those of its predecessor, the Recovery Loan Scheme, to provide continuity and stability for both lenders and the business community. 

Under the Growth Guarantee Scheme, the maximum facility sizes can reach up to £2m ($2.5m) per business.  

The minimum facility sizes begin at £1,000 for asset finance, invoice finance, and ABL, and £25,001 for term loans and overdrafts.  

Term loans and asset finance facilities are available for periods ranging from three months to six years while overdrafts, invoice finance, and ABL are available for three months to three years. 

Interest rates and fees will be determined by the lenders and will vary based on the specific lending proposal.  

Lenders may request personal guarantees at their discretion, following their standard commercial lending practices, the bank added. 

British Business Bank Guarantee and Wholesale Solutions managing director Reinald de Monchy said: “We’re excited to launch the Growth Guarantee Scheme, which will allow lenders to offer more finance to their customers.

“This will help to generate more sustainable growth across the UK and provide a springboard to many smaller businesses to scale up or stay ahead.”