British Business Bank’s Growth Guarantee Scheme hits £2.5bn milestone in lending to UK’s SMEs
The British Business Bank has reached the landmark milestone of £2.5bn of lending under its Growth Guarantee Scheme, with 69% of lending delivered to businesses outside London and the South East.
Over £200m of lending has been provided in each of the North West, West Midlands, East of England and Yorkshire & The Humber regions.
There has also been a wide range of industry sectors supported across the UK through the scheme. This includes over £368m for manufacturing, over £366m to wholesale and retail, and over £234m to the construction sector.
The Growth Guarantee Scheme is designed to support access to finance for UK smaller businesses as they look to invest and grow. The Growth Guarantee Scheme launched on 1 July 2024, with a wide range of products supported by a broad variety of accredited lenders, including term loans, overdrafts, asset finance, invoice finance and asset-based lending.
The Growth Guarantee Scheme can support facility sizes of up to £2m and provides the lender with a 70% government-backed guarantee. The borrower always remains 100% liable for the debt.
Chancellor of the Exchequer, Rachel Reeves, said: “The Growth Guarantee Scheme has made a huge impact on our regional economies, helping smaller businesses across the UK to invest and grow, creating jobs and putting more money in people’s pockets.
“The British Business Bank’s mission to support the financing needs of smaller businesses is vital to our Plan for Change growth mission which is why we increased its firepower by two-thirds at the Spending Review”.
Gareth Thomas, minister for small business, said: “As part of our Plan for Change we are committed to breaking down the barriers SMEs face when starting and scaling up, to create jobs and further boost the economy.
“This is an important milestone for the Growth Guarantee Scheme which plays a key role in helping us achieve this, by providing vital access to finance for smaller businesses right across the UK.”
Reinald de Monchy, chief banking officer, British Business Bank said: “This milestone is a demonstration of the important work done by the 50+ delivery partners who have signed up to the Growth Guarantee Scheme, since its launch in July 2024. In particular, it is fantastic to see how much lending has been provided to firms under five years old, and the diversity of sectors supported.
“The Government’s recent Spending Review will provide the scheme with funding until March 2030, and we are excited to see the additional impact it can generate for smaller businesses across the UK.”
Stefan Wolvaardt, chief financial officer, Simply Asset Finance quote: “With the government setting ambitious growth targets, injecting further funding into the system was crucial if we are to help SMEs across the UK achieve their potential. This is very welcome and we’re proud to be working alongside the British Business Bank to help deliver the Growth Guarantee Scheme.”
Phil Hughes, deputy managing director of SME Lending at Paragon Bank, said:”The Growth Guarantee Scheme has proven to be a powerful tool in enabling Paragon to provide greater support to ambitious UK businesses who need funding. We’ve already witnessed the significant impact it can have, particularly in key sectors like construction and agriculture, where initial investment costs often pose a major hurdle. The strong early results and high demand are clear indicators of its effectiveness – with continued support from the British Business Bank, we look forward to expanding our efforts even further.”
Tina McKenzie, policy chair, Federation of Small Businesses (FSB) said: “FSB campaigned for the Growth Guarantee Scheme to be created, and so we’re pleased to see this latest lending record, which shows just how vital the Scheme has been to so many small businesses up and down the country. As the UK’s grassroots business network, we particularly welcome how the funding has been spread right across all the regions and nations, unlocking wealth and job creation in FSB members and others in local communities.
“Small firms will be the engine of future economic growth, so getting them the finance they need is key. The Growth Guarantee Scheme reaches promising businesses which might otherwise not be able to turn their business plan into reality.”
Table 1: Drawn by Region
Region | Drawn value (£m) | % Value | Number of facilities | Number of facilities per 10,000 SMEs** |
East Midlands | 171.30 | 7% | 918 | 30.5 |
East of England | 221.15 | 9% | 1,261 | 27.11 |
London | 422.47 | 18% | 2,222 | 24.93 |
North East | 79.07 | 3% | 438 | 30.77 |
North West | 272.39 | 12% | 1,495 | 34.63 |
Northern Ireland | 38.97 | 2% | 145 | 12.77 |
Scotland | 127.05 | 5% | 766 | 24.77 |
South East | 309.02 | 13% | 1,845 | 22.91 |
South West | 188.69 | 8% | 1,056 | 22.38 |
Wales | 82.92 | 4% | 497 | 25.74 |
West Midlands | 231.28 | 10% | 1,253 | 33.76 |
Yorkshire and The Humber | 202.15 | 9% | 1,052 | 31.92 |
Unspecified* | 7.80 | 0% | 41 |
**The data for ‘Number of facilities per 10,000 SMEs’ is a calculation utilising data sourced from Business population estimates 2023 – GOV.UK (www.gov.uk).
Table 2: Drawn by Sector
SIC Group | Drawn value (£m) | % Value | Number of facilities |
Accommodation and food service activities | 135.24 | 6% | 936 |
Activities of households as employers; undifferentiated goods-and services-producing activities of households for own use | 0.20 | 0% | 3 |
Administrative and support service activities | 227.99 | 10% | 1,424 |
Agriculture, forestry and fishing | 37.86 | 2% | 366 |
Arts, entertainment and recreation | 54.63 | 2% | 387 |
Construction | 234.20 | 10% | 1,699 |
Education | 26.40 | 1% | 232 |
Electricity, gas, steam and air conditioning supply | 3.13 | 0% | 20 |
Financial and insurance activities | 77.37 | 3% | 290 |
Human health and social work activities | 91.48 | 4% | 628 |
Information and communication | 110.63 | 5% | 695 |
Manufacturing | 368.29 | 16% | 1,905 |
Mining and quarrying | 10.73 | 0% | 45 |
Other service activities | 56.13 | 2% | 519 |
Professional, scientific and technical activities | 201.68 | 9% | 1,247 |
Public administration and defence; compulsory social security | 1.52 | 0% | 11 |
Real estate activities | 207.60 | 9% | 694 |
Transportation and storage | 105.76 | 4% | 938 |
Water supply; sewerage, waste management and remediation activities | 36.87 | 2% | 186 |
Wholesale and retail trade; repair of motor vehicles and motorcycles | 366.57 | 16% | 2,602 |
Grand Total | 2,354.27 | 14,827 |
Table 3: Drawn by Facility Type
Scheme Facility Type | Drawn value (£m) | Number of facilities | % Value |
Business term loan | 1,730.00 | 10,955 | 73% |
Asset finance | 553.31 | 3,584 | 24% |
Invoice finance | 63.66 | 277 | 3% |
Revolving credit | 7.30 | 11 | 0% |
Grand Total | 2,354.27 | 14,827 |
Table 4: Drawn by Business Age
Age of Business | Drawn value (£m) | No. facilities | % Value |
Less than 1 year | 194.30 | 837 | 8% |
1 to 4 years | 439.38 | 3,132 | 19% |
5 to 9 years | 562.30 | 4,370 | 24% |
10 to 14 years | 418.04 | 2,713 | 18% |
15 to 24 years | 441.43 | 2,450 | 19% |
25 to 49 years | 243.25 | 1076 | 10% |
50 years or more | 55.57 | 249 | 2% |
Grand Total | 2,354.27 | 14,827 |
Table 5: Drawn by Company Size
Company Size (number of employees) | Drawn value (£m) | Number of facilities | % Value |
Fewer than 10 | 1,039.67 | 9,231 | 44% |
Between 10 and 49 | 920.24 | 4,518 | 39% |
Between 50 and 249 | 361.76 | 1017 | 15% |
More than 250 | 32.61 | 61 | 1% |
Grand Total | 2,54.27 | 14,827 |