What the guarantee is
The Growth Guarantee Scheme gives the lender a government-backed 70% guarantee against the outstanding balance of the facility. The scheme aims to give lenders greater certainty over credit risk, so they can lend to more viable smaller businesses that they would not otherwise consider.
If a lender can offer a commercial facility on better terms than a GGS-backed one, it will do so. Accredited lenders should only offer finance through GGS if they cannot offer a facility on equivalent terms without the guarantee.
What it does not do
Your business remains 100% liable for repaying the facility. The guarantee does not reduce your repayments, your interest or your debt. It also does not stop a lender taking security or, if it normally does, a personal guarantee. Lenders cannot take your principal private residence as security.
Lenders pay a scheme lender fee to use the scheme, and must pass on the economic benefit of the guarantee to your business after accounting for their costs in using it.
A worked example
The British Business Bank gives this example. A business borrows a £1 million facility with a £100,000 personal guarantee. It pays off £400,000, then defaults, owing £600,000. The lender recovers £100,000 from other secured business assets, leaving £500,000. The call on the personal guarantee is £100,000, leaving an initial loss of £400,000.
The lender claims 70% of that loss (£280,000) under the government guarantee, leaving £120,000 as the lender's final loss. The claim reduces the lender's loss. It does not cancel what the business owes.
How facilities have performed
The British Business Bank's performance data as at 30 June 2026, which combines GGS with the third Recovery Loan Scheme, covers 22,947 facilities. Of these, 17,534 (76.41%) were on schedule, 704 (3.07%) in arrears, 358 (1.56%) defaulted and 219 (0.95%) had been claimed on. A further 1,496 (6.52%) had been settled and 2,636 (11.49%) fully repaid.
Those figures describe lender claims on the guarantee. They say nothing about how a particular business will fare.
For what lenders can and cannot take, see GGS personal guarantees.
Work out your full repayments, with no discount for the guarantee, in the GGS loan calculator.
QUESTIONS
The Growth Guarantee Scheme government guarantee explained: questions
Does the guarantee reduce what I owe?
No. The business remains 100% liable for repaying the facility.
Who receives the guarantee?
The lender. The government gives the lender a 70% guarantee on the outstanding balance.
Why does a lender use it?
It gives the lender more certainty over credit risk, so it can lend to viable businesses it would not otherwise consider. A lender should not use it if it can offer equivalent terms without it.