Everything You Need to Know About the Growth Guarantee Scheme (Formerly Recovery Loan Scheme)

As of 1st July 2024, the Recovery Loan Scheme (RLS) has been extended and rebranded as the Growth Guarantee Scheme (GGS). This change reflects the UK Government’s continued commitment to helping businesses not only recover from the effects of the COVID-19 pandemic but also to support their growth and expansion in an evolving economic environment.

What is the Growth Guarantee Scheme (GGS)?

The Growth Guarantee Scheme is the evolved version of the original Recovery Loan Scheme, extending the program to provide more long-term support to UK businesses. The scheme is designed to help businesses of all sizes access the financing they need to expand, invest, and strengthen their operations in a post-pandemic economy.

While the Recovery Loan Scheme initially focused on helping businesses recover from the pandemic, the Growth Guarantee Scheme shifted its focus toward fostering business growth, with government-backed guarantees continuing to provide security for lenders.

Benefits of the Growth Guarantee Scheme for Businesses

The Growth Guarantee Scheme offers significant benefits to businesses seeking to invest in their future:
- Support for expansion
- Flexible financing
- Available to more businesses

Eligibility Criteria for the Growth Guarantee Scheme

To apply for the Growth Guarantee Scheme, businesses must meet certain eligibility criteria:
- Be based in the UK.
- Be able to demonstrate that they are viable or have the potential for growth.
- Have not entered insolvency proceedings.

Businesses that previously took advantage of the Recovery Loan Scheme, Bounce Back Loans, or CBILS are still eligible to apply for the Growth Guarantee Scheme.

Types of Finance Available Under the GGS

The Growth Guarantee Scheme offers a range of financing options to suit various business needs:
- Term loans
- Overdrafts
- Invoice finance
- Asset finance

How to Apply for the Growth Guarantee Scheme

Applying for the Growth Guarantee Scheme is straightforward when working with a financial expert like Blue Sky Finance.

Here’s how the process works:

1. Assess your business needs
2. Prepare documentation
3. Find the right lender
4. Submit your application

Understanding Interest Rates and Fees in the GGS

Similar to the Recovery Loan Scheme, the interest rates and fees for the Growth Guarantee Scheme vary depending on the lender and the type of finance selected. However, lenders are still encouraged to offer competitive terms that reflect the government-backed nature of the scheme. The business remains responsible for repaying the full loan amount, including any interest and fees, over the agreed term.

Government Guarantees and Lender Involvement

The 80% government guarantee remains a key feature of the Growth Guarantee Scheme, ensuring lenders are protected for the majority of the loan amount. However, businesses are still fully responsible for repaying the loan in full. The government’s involvement helps to incentivise lenders to offer more flexible and accessible loans, especially for growing businesses that may have struggled to secure financing through traditional channels.

Why Choose Blue Sky Finance for the Growth Guarantee Scheme?

At Blue Sky Finance, we provide expert, independent advice to help businesses navigate the complexities of the Growth Guarantee Scheme. With access to a wide range of lenders, we can help you secure the funding you need to grow your business. Our tailored approach ensures that you get the best possible deal, with terms that suit your business’s specific needs.

Can You Apply for the GGS if You’ve Used Other Loan Schemes?

Yes, businesses that have previously utilised the Bounce Back Loan Scheme, CBILS, or even the original Recovery Loan Scheme are still eligible to apply for the Growth Guarantee Scheme. The scheme is designed to offer continued support, allowing businesses to grow and expand, even if they have accessed other forms of government-backed loans.

Common Misconceptions About the Growth Guarantee Scheme

Several misconceptions may prevent businesses from taking advantage of the GGS:
Myth: The Growth Guarantee Scheme is only for recovering businesses.  
Fact: The scheme is now focused on supporting growth, so even businesses that are no longer in recovery mode can benefit.
Myth: Only large corporations can apply.  
Fact: The GGS is open to businesses of all sizes, including small and medium-sized enterprises (SMEs).

How Blue Sky Finance Can Help with Your GGS Application

The Growth Guarantee Scheme offers exciting opportunities for businesses looking to expand, but navigating the process can be complex. Blue Sky Finance offers personalised guidance to ensure you find the right lender, complete the necessary paperwork, and secure the funding you need. With our expertise, we’ll make the process smooth and stress-free, allowing you to focus on growing your business.

Contact Us for Expert Financial Guidance

If you're interested in exploring how the Growth Guarantee Scheme can help your business grow, Blue Sky Finance is here to provide the support and advice you need.

Contact us today to discuss your options and let us guide you through the process of securing the right financial package for your business.