Small and medium-sized businesses across the UK are set to benefit from a significant expansion of government-backed finance, with new measures designed to improve access to funding and support long-term growth.
At the heart of the package is a major enhancement of the British Business Bank's (BBB) Growth Guarantee Scheme (GGS), which helps lenders provide finance to smaller businesses by offering a 70% government guarantee on eligible commercial loans of up to £2 million.
Under the plans, the scheme will expand substantially over the coming years, supporting an additional £2 billion of SME lending annually by 2028/29. This will increase the total lending facilitated through the scheme to £3.35 billion each year, compared with the current £1.35 billion.
The reforms also make the scheme more flexible for growing businesses. The maximum loan term for borrowing of up to £1.1 million will increase from six years to ten years, giving firms longer to repay finance and easing pressure on cash flow.
Eligibility is also being widened. Businesses with annual turnover of up to £54 million will now be able to access the scheme, up from the previous limit of £45 million, allowing more established SMEs to benefit from government-backed lending.
The British Business Bank estimates that the changes will increase the number of businesses supported from around 8,000 to 20,000 each year by 2028/29. This represents an additional 12,000 businesses gaining access to finance annually.
The government hopes the reforms will help address one of the biggest barriers to business growth: securing affordable funding for investment. Access to finance remains a challenge for many SMEs looking to expand, recruit staff, invest in new technology or enter new markets.
Business groups have broadly welcomed the announcement. Louise Hellem, Chief Economist at the Confederation of British Industry (CBI), said the package recognises the practical funding challenges faced by smaller firms and praised the government for responding to business concerns.
She added that successful implementation will be key, with businesses needing support that is straightforward to access, widely understood and capable of attracting additional private investment.
If delivered effectively, the expanded Growth Guarantee Scheme could provide a significant boost for ambitious SMEs, helping more businesses invest, innovate and grow while contributing to stronger productivity and economic growth across the UK.
