Growth Guarantee Scheme
About The Growth Guarantee Scheme
The Growth Guarantee Scheme (GGS) is designed to support access to finance for UK small businesses as they look to invest and grow.
The scheme aims to provide greater certainty over credit risk, enabling Propel Finance to provide finance to more viable smaller businesses that they wouldn't otherwise consider. If Propel Finance can offer a commercial loan on better terms, we will do so.
Growth Guarantee Scheme backed facilities are provided at our discretion and we must carry out standard credit and fraud checks for all applicants.
Growth Guarantee Scheme Features
Up to £2m per business group: The maximum amount for a facility provided under the scheme is generally £2m per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1m per business group for Northern Ireland Protocol borrowers. Minimum facility sizes vary, starting at £1,000 for asset finance, invoice finance and asset-based lending, and £25,001 for term loans and overdrafts. Propel Finance offers a minimum GGS facility of £100k.
Wide range of products: The Growth Guarantee Scheme supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities. Not all lenders will be able to offer all products. Propel Finance only offers asset finance.
Term length: Term loans and asset finance facilities are available from three months up to six years, with overdrafts, invoice finance and asset-based lending available from three months up to three years. Propel Finance's GGS asset finance facilities are available from 12 to 72 months depending on the equipment type.
Access to multiple schemes: 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 borrowing under some of these schemes may reduce the maximum amount the borrower is eligible for.
Pricing: Interest rates and fees charged by Propel Finance will vary and will depend on the specific lending proposal. The Propel Finance pricing will take into account the benefit of the Government guarantee and a fee that is charged to Propel Finance for the guarantee.
Personal Guarantees: Personal guarantees can be taken at Propel Finances' discretion, in line with our normal commercial lending practices. Taking security over Principal Private Residences is strictly prohibited within the Scheme though.
Guarantee is to Propel Finance: The scheme provides Propel Finance with a 70% government-backed guarantee against the outstanding balance of the facility after it has completed its normal recovery process. The borrower always remains 100% liable for the debt.
Decision-making delegated to Propel Finance: Growth Guarantee Scheme-backed facilities are provided at the discretion of Propel Finance. Propel Finance are required to undertake standard credit and fraud checks for all applicants.
The assistance provided through the Growth Guarantee Scheme, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. More information on subsidies is available here.
Eligibility Restrictions
(not an exhaustive list)
Turnover limit: The scheme is open to smaller businesses with a turnover of up to £45m (on a group basis, where part of a group).
UK-based: The borrower must be carrying out trading activity in the UK and, for most businesses, generating more than 50% of its income from trading activity.
Viability test: Propel Finance must consider that the borrower has a viable business proposition.
Business in difficulty: The borrower must not be a business in difficulty, including not being in relevant insolvency proceedings.
Subsidy limits: Borrowers will need to provide written confirmation that receipt of the Growth Guarantee Scheme facility will not mean that the business exceeds the maximum amount of subsidy they are allowed to receive. All borrowers in receipt of a subsidy from a publicly funded programme should be provided with a written statement, confirming the level and type of aid received.
The assistance provided through the Growth Guarantee Scheme, like many Government-backed business support activities, is regarded as a subsidy and is deemed to benefit the borrower. There is a limit to the amount of subsidy that may be received by a borrower, and its wider group, over any rolling three-year period. Any previous subsidy may reduce the amount a business can borrow. More information on subsidies is available here.
Please note, the following are not eligible under Growth Guarantee Scheme:
- Banks, Building Societies, Insurers and Reinsurers
(excluding Insurance Brokers) - Public sector bodies
- State-funded primary and secondary schools
- Principle Business activity of primary extraction of coal, lignite, crude petroleum and natural gas, and certain support activities for petroleum and natural gas extraction.
Advisory Information
Borrowers will need to provide certain documents when they apply for a Growth Guarantee Scheme-backed facility. These are likely to include:
- Management accounts
- Business plan
- Historic accounts
- Details of assets
- Details of previous subsidy awards
Decision-making on whether a business is eligible for the Growth Guarantee Scheme is fully delegated to Propel Finance by the British Business Bank.
Legal Notice
The Growth Guarantee Scheme is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business & Trade. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA. British Business Bank plc and its subsidiaries are not banking instructions and do not operate as such.
Visit www.british-business-bank.co.uk/finance-options/
debt-finance/growth-guarantee-scheme
