- Turnover must be £45 million or less across your business group.
- You must carry out trading activity in the UK.
- Lenders, not the government, make the final lending decision.
- Most sectors qualify; banks, insurers and state-funded schools are among the exceptions.
- Having used the Recovery Loan Scheme before does not disqualify you.
Growth Guarantee Scheme eligibility is simpler than many business owners expect. The scheme is open to most UK trading businesses, yet the rules around turnover, viability and sectors still catch people out. This guide explains exactly who qualifies, what lenders assess, and how to prepare a strong application for Growth Guarantee Scheme funding.
☰ On this page
- What is the Growth Guarantee Scheme?
- Growth Guarantee Scheme eligibility at a glance
- The £45 million turnover cap explained
- The viability test: what lenders actually assess
- The UK trading activity requirement
- Sector restrictions: who cannot apply
- Can newer businesses qualify?
- Does previous scheme use affect eligibility?
- Subsidy rules: the part most people skip
- Security and personal guarantees
- How to check your own eligibility: a five-step process
- Common eligibility mistakes to avoid
- Documents you will need
- Why applications get declined — and what to do
- Your next step
- Frequently Asked Questions
What is the Growth Guarantee Scheme?
The Growth Guarantee Scheme (GGS) is a UK government-backed lending programme administered by the British Business Bank. It launched on 1 July 2024 as the successor to the Recovery Loan Scheme. The government gives accredited lenders a 70% guarantee on each facility, which encourages them to lend to smaller businesses.
The guarantee protects the lender, not you. You remain 100% liable for the full debt. Facilities run from £1,000 up to £2 million and cover term loans, overdrafts, invoice finance and asset finance. An extension of the scheme to 2030 has been announced, so it is a long-term part of the UK funding landscape.
If you want the commercial detail — amounts, terms and how to apply — see our main Government Growth Scheme page. For how GGS sits alongside Start Up Loans and other state-backed routes, see our overview of government business loans in the UK. This article focuses purely on eligibility.
Growth Guarantee Scheme eligibility at a glance
Eligibility splits into two layers: the scheme rules set by the British Business Bank, and the credit policy of each accredited lender. You must pass both. The core scheme rules are:
- UK trading activity — your business must carry out trading activity in the UK.
- Turnover cap — group turnover must not exceed £45 million.
- Viability — the lender must consider your business viable, ignoring any short-term concerns.
- Not in difficulty — you must not be in relevant insolvency proceedings.
- Legitimate purpose — funds must be used for a genuine business purpose, such as cashflow, investment or growth.
- Subsidy limits — you must confirm you are within your subsidy allowance, which the lender checks with you.
Sole traders, partnerships, limited companies and limited liability partnerships can all apply. The legal structure of your business is not a barrier.
Scheme rules vs lender rules: a quick reference
Many declined applicants believe they failed the scheme when they actually failed one lender’s credit policy. This table shows who sets each test.
| Test | Who sets it | Can another lender take a different view? |
|---|---|---|
| £45m turnover cap | Scheme rule | No — fixed for every lender |
| UK trading activity | Scheme rule | No — fixed for every lender |
| Excluded sectors | Scheme rule | No — but the excluded list is short |
| Viability assessment | Lender policy | Yes — appetite varies widely |
| Affordability thresholds | Lender policy | Yes — models differ by lender |
| Credit history tolerance | Lender policy | Yes — some price for risk others decline |
The practical lesson: if you pass the three scheme rules, eligibility is rarely your real problem. Lender selection is.
The £45 million turnover cap explained
The turnover cap is £45 million per business group, not per company. If your company sits within a wider group, the lender assesses the combined group turnover. A £10 million subsidiary inside a £60 million group would not qualify.
Turnover is normally taken from your most recent accounts or management figures. A business growing quickly towards the cap can still apply, as the test applies at the point of application. If you are near the threshold, raise it with the lender or your broker early so the group position can be checked properly.
The viability test: what lenders actually assess
Viability means the lender believes your business can trade profitably and repay the facility. The scheme tells lenders to ignore short-term performance concerns, but each lender still applies its own credit policy. In practice, they look at three things.
Trading history and trajectory
Lenders want evidence of real trading. They review revenue trends, customer concentration and how the business has handled bumps. A dip in one year will not sink an application if the overall direction is sound and you can explain it.
Affordability and serviceability
The key question is whether your cashflow covers the repayments with headroom. Lenders typically test EBITDA or net cashflow against the proposed repayment. Before you apply, run your own numbers through our business loan calculator to see what a realistic monthly repayment looks like.
Credit conduct
Lenders review the credit record of the business and its directors. Missed payments, CCJs or heavy reliance on short-term debt all invite questions. Adverse credit is not an automatic decline under the scheme, but it narrows the pool of lenders willing to say yes. Different lenders draw the line in very different places — our guide to Growth Guarantee Scheme lenders explains why.
A worked affordability example
Numbers make the viability test concrete. Take a Midlands engineering firm with £1.4 million turnover seeking a £150,000 GGS term loan over five years to buy a CNC machine.
- EBITDA: £160,000 a year, steady across the last two years.
- Existing debt service: £24,000 a year on an asset finance agreement.
- Proposed repayment: about £38,300 a year at a representative 10% rate (roughly £3,190 a month).
Total debt service would be £62,300 against £160,000 of EBITDA. That is cover of about 2.5 times — comfortably above the 1.25–1.5 times minimum most lenders want. This application passes affordability with headroom, so the conversation moves to terms rather than survival of the deal.
Now flip one number. If EBITDA were £70,000, cover drops to about 1.1 times and most lenders decline or cut the loan size. The fix is rarely arguing harder; it is borrowing less, extending the term, or choosing asset finance where the machine itself carries part of the risk.
The UK trading activity requirement
Your business must generate trading income from activity carried out in the UK. You do not need to be UK-owned, and exporting is fine — in fact, supporting exporters is part of the scheme’s purpose. What matters is genuine UK trading substance.
Pure holding companies with no trading activity, and businesses that operate wholly overseas, do not qualify. If your structure is complex, lenders will look through to where the trading actually happens.
Sector restrictions: who cannot apply
Most sectors are eligible, including retail, hospitality, construction, manufacturing, professional services and technology. A small list of sectors is excluded under the scheme rules:
- Banks, building societies, insurers and reinsurers (insurance brokers are eligible).
- Public-sector bodies.
- State-funded primary and secondary schools.
Some lenders add their own appetite restrictions on top — for example, around property speculation or sectors they consider higher risk. That is lender policy, not a scheme rule, so a decline from one lender does not mean the sector is excluded.
Can newer businesses qualify?
Yes. There is no minimum trading age in the scheme rules. The practical hurdle is evidence: a lender must still be able to form a view on viability and affordability. A business with 12–24 months of trading and solid management figures has a realistic chance, especially with asset finance or invoice finance where the security itself reduces risk.
Very early-stage businesses with little revenue usually struggle to pass affordability tests. If that is you, a Start Up Loan or other early-stage routes may fit better — see our guide to startup business loans in the UK for the alternatives.
Does previous scheme use affect eligibility?
No. Businesses that borrowed under the Recovery Loan Scheme, CBILS or a Bounce Back Loan can still apply for a Growth Guarantee Scheme facility. Previous scheme borrowing may affect the maximum amount you can take, because outstanding scheme facilities are considered, but it is not a disqualification.
The schemes are closely related — GGS kept most of the final Recovery Loan Scheme rules. Our comparison of the Growth Guarantee Scheme vs the Recovery Loan Scheme covers exactly what carried over and what changed.
Subsidy rules: the part most people skip
A Growth Guarantee Scheme facility gives your business a benefit, and that benefit counts as a subsidy under UK subsidy control rules. When you apply, the lender asks you to confirm the subsidies you have received over the current and previous two fiscal years.
For most small businesses this is a formality. It matters if you have received substantial grants or other subsidised support recently, because there are limits on how much subsidy one business can receive. Keep records of grant awards and subsidised loans so you can declare them accurately. The interaction between grants and guaranteed loans is explained in our guide to business grants vs government loans.
Security and personal guarantees
Eligibility does not depend on offering security. Lenders can take security and can request personal guarantees at their discretion, as they would for normal commercial lending. One firm scheme rule protects you: a lender cannot take your principal private residence as security for a Growth Guarantee Scheme facility.
Whether you will actually be asked for a personal guarantee depends on the lender, the product and the amount. We cover the detail — including how to limit your exposure — in our guide to personal guarantees on the Growth Guarantee Scheme.
How to check your own eligibility: a five-step process
You can establish where you stand in under an hour, before any lender sees your name. Work through these steps in order.
Step 1: Confirm the scheme basics
Check the three fixed rules first: UK trading activity, group turnover of £45 million or less, and a sector outside the short excluded list. If you pass all three, the scheme is open to you. Everything after this point is lender judgement, not scheme law.
Step 2: Run your own affordability test
Take your last twelve months of EBITDA or net profit plus depreciation. Subtract existing annual debt repayments. What remains should cover the proposed new repayment at least 1.25 times over. Use our business loan calculator to estimate the repayment at a realistic rate before a lender does it for you.
Step 3: Review your credit position
Check the business credit file and each director’s personal file. Note any CCJs, defaults or late filings at Companies House. None of these automatically ends an application, but knowing about them first lets you explain them upfront — which lands far better than a lender discovering them.
Step 4: Define the purpose in one sentence
“£120,000 to buy two refrigerated vans, adding £200,000 of contracted delivery revenue” gets approved. “Some working capital to be safe” gets questioned. Lenders fund plans, not vagueness, and the purpose drives which product fits.
Step 5: List your subsidies
Write down every grant or subsidised loan received in the current and previous two fiscal years. You will declare these during the application, and arriving with the list prepared removes a common source of delay.
Common eligibility mistakes to avoid
The same avoidable errors appear in declined applications again and again:
- Assuming a bank decline means scheme ineligibility. It does not. The bank applied its own credit policy — another accredited lender can approve the same case.
- Ignoring group turnover. Applying as a £8 million subsidiary of a £50 million group wastes everyone’s time. Check the group position first.
- Applying for the wrong product. Equipment purchases forced through unsecured term loans fail affordability tests that asset finance would pass.
- Hiding adverse credit. Lenders always find it. Disclosed and explained, a two-year-old CCJ is survivable; discovered, it kills trust and the deal.
- Stale paperwork. Accounts more than nine months old with no management figures suggest a business that does not watch its own numbers.
- Overlooking the security rules. Some owners refuse to apply because they fear losing their home. The scheme bars lenders from taking your principal private residence as security, so this fear is misplaced — see our secured vs unsecured business loans guide for how security actually works.
Documents you will need
Preparation is the biggest single factor you control. Most lenders ask for a similar pack:
- Filed accounts for the last one to two years.
- Recent management accounts (profit and loss plus balance sheet).
- Three to six months of business bank statements.
- A short statement of what the funds are for.
- Cashflow or profit forecasts for larger or growth-driven requests.
- Details of existing borrowing and any other subsidies received.
Asset finance and invoice finance applications also need details of the asset or your debtor book. A complete, well-presented pack speeds up decisions and improves the terms you are offered.
Why applications get declined — and what to do
Most declines come down to one of four issues: affordability that looks too tight, adverse credit, a purpose the lender will not fund, or weak paperwork. None of these is necessarily final.
Because more than one lender is accredited under the scheme, a decline from your bank is not a decline from the scheme. Each lender has different appetite, products and risk thresholds. A whole-of-market broker can match your profile to the lenders most likely to approve it, rather than you applying blind. For background on how lending decisions work generally, see how business loans work.
Your next step
If your business trades in the UK, turns over £45 million or less and can show it can afford the repayments, you are likely to meet Growth Guarantee Scheme eligibility rules. The next step is matching your business to the right accredited lender. As an FCA-authorised commercial finance brokerage, we search the market for you. Start on our Growth Guarantee Scheme funding page to check your options and get an indication without affecting your credit score.
Frequently Asked Questions
UK businesses with turnover of £45 million or less that carry out trading activity in the UK are eligible. The lender must also consider the business viable and able to afford repayments. Sole traders, partnerships and limited companies can all apply through an accredited lender or broker.
The cap applies to your whole business group, not a single company. Lenders normally use your most recent filed accounts or management figures. If your company is part of a larger group, the combined group turnover must be £45 million or less.
Yes. The scheme is open to sole traders, partnerships, limited liability partnerships and limited companies. The same turnover, UK trading and viability rules apply regardless of legal structure, though product availability can vary by lender.
Banks, building societies, insurers and reinsurers, public-sector bodies and state-funded primary and secondary schools are excluded. Insurance brokers are eligible. Almost every other trading sector qualifies, although individual lenders apply their own appetite on top of the scheme rules.
Yes. Previous borrowing under RLS, CBILS or Bounce Back Loans does not disqualify you. Outstanding scheme facilities may reduce the maximum new amount available, and the lender will assess total affordability across all your borrowing.
Expect to provide filed accounts, recent management accounts, three to six months of bank statements and a clear statement of purpose. Larger requests usually need cashflow forecasts. Asset and invoice finance applications also need details of the asset or debtor book.
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