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British Business Bank Boost Government-Backed Loans to Small Businesses

British Business Bank, SMBs, working capital

The British Business Bank, the U.K. government’s economic development bank, has launched a new program designed to support access to finance for smaller U.K. businesses.

The Growth Guarantee Scheme, which replaces the Recovery Loan Scheme, is expected to support about 11,000 such businesses through March 31, 2026, the bank said in a Monday (July 8) press release.

The British Business Bank has accredited 41 lenders for the program and will accredit more in the coming weeks, according to the release. Twenty of these lenders are now open for applications, while the remainder are putting in place the operations they need to start lending under the program.

The lenders will provide term loans, overdrafts, asset finance, invoice finance, asset-based lending and other finance types to smaller businesses, per the release.

The Growth Guarantee Scheme will allow lenders to offer more finance to their customers, Reinald de Monchy, managing director, guarantee and wholesale solutions at British Business Bank, said in the release.

“This will help to generate more sustainable growth across the U.K. and provide a springboard to many smaller businesses to scale up or stay ahead,” de Monchy said.

The Growth Guarantee Scheme provides the lender with a 70% government-backed guarantee, according to the release. The borrower always remains 100% liable for the debt.

The terms of the program are similar to those of its predecessor, the Recovery Loan Scheme, to provide continuity and consistency, the release said.

The terms include up to 2 million pounds per business group, term lengths of three months to six years, and pricing that takes into account the benefit of the government guarantee, per the release. Facilities backed by the program are provided at the discretion of the lender.

The U.K. Parliament’s Treasury Committee reported in April that more than 140,000 business accounts in the U.K. — 2.7% of all accounts held by small businesses — were closed by major banks in the previous year.

These “de-banking” figures were released as part of the committee’s inquiry into whether small- to medium-sized businesses (SMBs) have adequate access to financing.

Banks that provided data for the committee’s report attributed the closure of these accounts to the banks’ risk appetite, financial crime concerns, lack of information sharing and other reasons.

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