The Growth Guarantee Scheme (GGS) is back on many lenders’ desks – and if you want a fast yes, your forecasts need to do more than add up. With a 70% government-backed guarantee to lenders and facilities up to £2m per group in most of the UK, the scheme can help established small and medium-sized enterprises (SMEs) to fund investment and ease cashflow through 2025/26. But the guarantee sits with the bank, not you, and credit decisions are still rigorous (British Business Bank). Inflation also remains sticky – the consumer price index (CPI) was 3.8% in September 2025 – keeping funding costs sensitive to data releases (Office for National Statistics (ONS), 2025). Pair that with modest gross domestic product (GDP) growth of 1.0% projected for 2025 (Office for Budget Responsibility (OBR), 2025) and lenders will interrogate your numbers.
In this article, we explain how to present GGS applications with lender-ready forecasts, what eligibility and security look like and the templates banks expect to see. If you prefer hands-on support, our financial director services and strategic planning teams can build and stress test the pack with you.
Who the scheme suits and what lenders check
The GGS targets smaller UK businesses with turnover up to £45m and can support term loans, overdrafts, asset finance, invoice finance and asset-based lending (ABL). Lenders still carry out full credit checks and the borrower remains 100% liable for the debt; the government guarantee covers 70% of a lender’s net loss after recoveries. Expect the bank to focus on three areas.
- Eligibility and purpose: UK trading activity, affordability and non-distress status. Funds can support investment and working capital, including cashflow pressures from tariffs or supply chain shifts.
- Security and structure: Personal guarantees are at the lender’s discretion; your home cannot be taken as security. Leverage, term and any debenture will be assessed against sustainable free cashflow.
- Forecast quality: Integrated statements, conservative assumptions, clear audit trail from actuals and sensitivity analysis that shows headroom under downside cases.
Build an integrated, lender-ready model
Banks rarely approve on a spreadsheet alone; they approve on the story the spreadsheet proves. Your GGS model should cover 36 months at monthly granularity with an annual roll-up. Make sure it includes the following.
- Three-statement build: Profit and loss, balance sheet and cashflow linked properly. No hard-coded plugs.
- Cash drivers: Debtor days, creditor days, stock turns, VAT/payment timings and seasonality aligned to operational plans.
- Tax and payroll: Corporation tax at 25% main rate or 19% small profits rate with marginal relief as relevant for 2025/26 (HMRC, 2025). Employer Class 1A/1B national insurance contributions (NIC) on benefits at 15% from 6 April 2025 (HMRC, 2025).
- Capital expenditure (capex) and funding: Asset finance schedules, capitalisation policy, depreciation lives and interest linked to the bank’s pricing grid.
- Covenant and headroom tracking: Interest cover, debt service cover and a rolling 13-week cash headroom chart.
- Sensitivity pack: 5–10% revenue slippage, gross margin compression, debtor stretch, rate rise and capex delay. Show minimum liquidity and covenant headroom under each scenario.
Example: A £750k term loan over five years, priced at a variable rate. Your base case shows EBITDA (earnings before interest, taxes, depreciation and amortisation) of £420k, capex of £300k and stable debtor days at 45. A downside stretches debtor days to 60 and trims gross margin by 2 points; the cashflow still covers debt service with at least 20% headroom in all months. That picture – plus evidence you’ve managed working capital before – is what unlocks approval.
Present the pack the way credit committees like it
The GGS does not change how banks assess risk – it standardises it. Package your submission so a credit officer can scan, test and approve it quickly.
- Executive summary: One page covering purpose of facility, amount, term, security and use of funds. Include a succinct case for how the finance converts into revenue, margin and cash.
- Assumptions book: Driver table for volumes, pricing, margins, payroll, working capital, tax and capex. Cite sources for external inputs (such as supplier price lists, order book and signed contracts).
- Actuals bridge: Last two filed years plus year-to-date management accounts. Bridge from trailing 12-month actuals to year-one forecast so the pivot points are obvious.
- Model outputs: Monthly financials, covenant tests and a clear cash waterfall. Lock the model and provide a version with inputs unlocked for the bank’s sensitivity runs.
- Risk register: Top five risks and mitigations – for example, supplier concentration, foreign exchange exposure, single-site capacity. Keep it practical and costed.
Tip: If you use invoice finance under the GGS, reconcile your debtor book to the borrowing base in the appendix and include concentration caps in your downside.
Growth Guarantee Scheme: Security, pricing and terms to expect
While pricing varies by lender, the structure is familiar across the market.
- Maximum facility: Up to £2m per business group in Great Britain – up to £1m for borrowers in scope of the Windsor Framework; product minimums apply.
- Products and term: Term loans and asset finance up to six years; overdrafts, invoice finance and ABL up to three years.
- Security and guarantees: Personal guarantees may be required; principal private residences are excluded from security.
- Subsidy limits: You must confirm you remain within subsidy allowances over a rolling three-year period.
Remember, where a commercial loan is available on better terms, lenders must offer that instead – the scheme improves access, not the commercial reality of your risk profile.
Bake correct 2025/26 assumptions into your model
Incorrect tax and payroll settings are an easy way to lose credibility. For 2025/26 set the following.
- Corporation tax: Main rate is 25%, small profits rate is 19% And marginal relief between £50,001 and £250,000 of profits.
- Employer NIC on benefits: Class 1A/1B is 15% from 6 April 2025.
- Inflation context: CPI running at 3.8% year-on-year in September 2025 – useful for pricing and cost escalators.
- Macro backdrop: OBR central forecast for real GDP growth at 1.0% for 2025 – keep volume growth realistic and show productivity gains.
If your company is upgrading its accounts processes, note that Companies House is tightening transparency and filing requirements over the next few years, reinforcing the need for clean ledgers and timely management information (Companies House, 2025). Good hygiene speeds credit decisions.
How we help – and what to do next
The growth guarantee scheme can be a cost-effective way to fund kit, expand capacity or smooth cashflow – but only with a model that stands up to the bank’s questions. Our approach is simple: get the 2025/26 tax and payroll rules right, tie your operational plan to a tight integrated forecast and prove headroom under sensible downsides. We focus lenders on the strengths – recurring revenue, sticky customers, working capital discipline – while being honest about risks.
If you want an experienced hand to shape your growth guarantee scheme pack, we can work with you to build the model, draft the credit narrative and liaise with the lender so you can stay focused on delivery. Start by sending us your last filed accounts and year-to-date numbers. We’ll create a lender-ready plan and, if helpful, stay on as an outsourced finance director to keep reporting sharp through the loan term.
If you’re considering the Growth Guarantee Scheme, get in touch for a lender-ready forecast and application review today.