Responding to news that the British Business Bank has launched the Growth Guarantee Scheme, Martin McTague, National Chair of the Federation of Small Businesses (FSB) said:
“We are delighted that the British Business Bank has officially launched the Growth Guarantee Scheme, to get much-needed finance to start-ups and scale-ups, so they can grow. This is something FSB has campaigned for vigorously, as we know the predecessor scheme made a clear difference to support lending from banks and lenders to small businesses that would otherwise not have materialised, as they came out from the worst of the pandemic.
“The new scheme will help small firms get the funding they require to be able to achieve their dreams. The Growth Guarantee Scheme will run until March 2026, and aims to support 11,000 small businesses over that time period, with 41 lenders already signed up, and 20 already open for applications.
“Small firms’ borrowing environment remains held back by stubbornly high interest rates and some reluctance among lenders to extend finance to firms seen as riskier and less viable due to their size and the diversity of proposals compared to their standard/corporate counterparts.
“The over-application of personal guarantees has also dampened further small firms’ enthusiasm for borrowing to fund expansion which requires corrective action by the FCA under direction of the new Treasury, which the Chancellor said will be the most pro-growth Treasury the country has ever seen.
“We will be working closely with all parts of Government as they look to deliver on the Labour party’s manifesto promise to protect the flow of funding to small firms amid the threat posed by the potential removal of the SME Supporting Factor, which allows lenders to hold a lower level of capital to counterbalance loans to SMEs, in the implementation of the Basel 3.1 standards.
“The Growth Guarantee Scheme will be an important part of the funding landscape for small firms, whose growth will be an indispensable ingredient in overall economic recovery in the UK.”
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