The Growth Guarantee Scheme just got bigger. Here’s why it’s still underused — and how it can help your business buy its own trading premises with a commercial mortgage.
On 13 July, the Chancellor stood up ahead of her Mansion House speech and announced what she called the most significant reforms to small business finance in years. The centrepiece was an expansion of the British Business Bank’s Growth Guarantee Scheme – the GGS. You can read the full announcement on GOV.UK.
The headlines wrote themselves. “Billions unlocked.” “Tens of thousands of businesses.” Good news, and I’m genuinely pleased to see it.
But I’ve been doing this for over 30 years, and I’ve learned to read the announcement, not the headline. So let me tell you what actually changed, why the scheme is still the most underused tool I come across, and the one use for it that almost nobody talks about – buying your own trading premises.
Strip away the fanfare and here’s what the reforms do. The scheme scales up to support an extra £2 billion of lending a year by 2028/29. The maximum loan term rises from six to ten years for loans up to £1.1 million. And the turnover limit for eligible businesses goes up from £45 million to £54 million.
That’s it. Three sensible, welcome tweaks to a scheme that already works.
Now, I’m not knocking it. Longer terms genuinely help – a ten-year guarantee to the lender is far more attractive. It doesn’ mean that loan repayment terms have changed because many lenders will lend beyond the guarantee period, but now they have a guarantee for much longer, and that alone will turn some “no”s into “yes”s. But notice the date: 2028/29.
This isn’t money landing in anyone’s account this quarter. It’s a phased expansion of an existing scheme, not a brand new pot of cash. The £500 million the Chancellor also mentioned sits in a different programme (ENABLE Guarantees) aimed at innovative, IP-rich firms – not the GGS at all.
So if you read “billions unlocked” and pictured a cheque in the post, park that. What’s really happened is that a quietly effective scheme has been given more headroom.
Which brings me to the bigger point.
Since it launched in 2022, the Growth Guarantee Scheme and its predecessor have delivered over £3.7 billion of finance to UK SMEs – and £2.5 billion of that reached businesses outside London and the South East. The British Business Bank reckons every £1 spent on the scheme supports around £10 of lending. It works.
And yet I still find myself explaining what it actually is on an almost weekly basis. So here’s the plain-English version.
Here’s the bit people get wrong, and I’d be doing you a disservice not to say it plainly: the guarantee protects the lender, not you. You remain fully liable for every penny you borrow. The scheme doesn’t make the debt disappear if things go wrong – it just makes the lender braver at the start. Anyone who tells you it’s “free government money” hasn’t read the small print.
If you want to protect yourself then see this post.
Understand this, and the scheme stops being a mystery and starts being a tool that offers a real opportunity. And there’s one job it does brilliantly that barely gets a mention.
Most people think of the GGS as a working-capital loan – money to cover stock, wages, a cash-flow gap. Fair enough. But a Growth Guarantee Scheme facility can also sit behind a term loan used to buy property. In other words, it can help fund a commercial mortgage on the premises your business already trades from.
That’s the use I get most excited about, because for a lot of businesses it’s the single best financial decision they’ll ever make.
Think about it. You’ve been renting your unit for years. The rent goes up every review – prime industrial and office rents have been climbing 4% to 6% a year, according to Savills. Every payment you make builds your landlord’s wealth, not yours. Then one day the landlord decides to sell.
That moment is an opportunity most tenants completely miss.
Here’s something that surprised a lot of people. Around 45% of UK commercial property is now owner-occupied rather than rented, according to the Property Industry Alliance’s Property Data Report. The long drift towards businesses owning their own bricks and mortar is real, and it’s accelerating.
Part of the reason is cost. Recent market analysis found that for owner-occupiers, buying commercial premises can work out up to 37% cheaper than renting the equivalent space (Property Reporter). Instead of paying rent into someone else’s pension, you’re paying down an asset you own, hedging against future rent rises, and putting a tangible, appreciating asset on your balance sheet.
Now look at it from the landlord’s side. A landlord who wants to sell a tenanted commercial unit on the open market faces a choice that isn’t always comfortable. Sell with the tenant in place and the buyer is an investor who’ll want a discount for the risk. Sell with vacant possession and they’ve got to get you out first – and the Landlord and Tenant Act 1954 gives many commercial tenants the right to renew, so that’s rarely quick or cheap (I’ve written before about how the 1954 Act shapes these deals).
Selling to the sitting tenant sidesteps all of it. No agent’s board, no void period, no vacant-possession headache, no awkward negotiation over who’s leaving. The landlord gets a clean sale to a motivated buyer who knows the building better than anyone. And you, the tenant, get to own the roof over your business. That’s why these deals so often land at a price that suits both sides. If your landlord ever mentions selling, that’s not a threat – it’s a door opening.
If you’re a business owner renting your premises, do three things.
First, find out whether your landlord has any intention of selling – a straight conversation costs nothing.
Second, get a realistic sense of what you could borrow, because the numbers are often better than people assume, especially with the GGS behind a commercial mortgage.
Third, don’t wait for the “perfect” moment. With borrowing costs where they are, the price of hesitating tends to be higher than the price of acting – something I’ve written about before.
And if you already borrow, the same scheme can help you restructure existing debt onto better terms – I covered exactly how in this piece on using the GGS to reset your business debt.
The Growth Guarantee Scheme has just been handed more firepower. That’s worth celebrating. But its real value has never been the size of the pot – it’s that it quietly makes lenders say yes to good businesses doing sensible things. Buying the premises you already trade from is about as sensible as it gets.
In cricketing terms, this isn’t a slog for the boundary. It’s the well-run single that quietly builds an innings. The flashy announcements will fade by Wednesday. A building you own is still yours in 2040.
If you’re renting your premises and wondering whether buying is within reach – or if a landlord has hinted they might sell and you’re not sure where to start – that’s exactly the kind of conversation I’m always happy to have. No pressure, no jargon. Just a straight answer about what’s possible.
David Farmer Lime Finance Solutions
It’s a government-backed scheme run by the British Business Bank. The government guarantees 70% of an eligible loan to the lender, which reduces the lender’s risk and makes them more willing to lend to viable small businesses. The loan comes from a normal bank or specialist lender, not from the government.
Yes. The scheme can sit behind a term loan used to purchase property providing it is a commercial mortgage on the premises your business trades from. Eligibility is decided by the accredited lender, so it’s worth getting the deal structured properly from the start.
Now that would be a good scheme… No – and this is the most important thing to understand. The 70% guarantee protects the lender, not you. You remain fully liable for the whole loan. The scheme makes lenders more willing to say yes; it does not remove your responsibility to repay.
Broadly, UK-based trading businesses with turnover under the scheme limit (rising from £45 million to £54 million under the new reforms) that generate more than half their turnover from trading and have a borrowing proposal the lender considers viable. Banks, insurers and public bodies are excluded.
Three main things: the scheme will support an extra £2 billion of lending a year by 2028/29, the maximum loan term rises from six to ten years on loans up to £1.1 million, and the turnover eligibility limit rises from £45 million to £54 million. It’s an expansion of an existing scheme, phased in over the next few years – not a new pot of instant cash.
It’s often the cleanest sale available. It avoids void periods, vacant-possession complications under the Landlord and Tenant Act 1954, and selling at an investor discount. For the tenant, it’s a chance to stop paying rent and start owning an appreciating asset – so these deals frequently suit both sides.
You didn’t expect it to be that simple? No. Whilst the growth guarantee scheme offers that support to a lender for a longer period it doesn’t mean your loan has to be over that period. Most commercial mortgage lenders on this scheme will offer a loan term much longer, it is just that the government guarantee only lasts a maximum of 10 years. In theory, come that time you have a proven track record, have paid down the loan and the lender would no longer need the guarantee.
Lime Finance Solutions is a trading name of Lime Coaching & Consultancy Ltd, authorised and regulated by the Financial Conduct Authority (FRN: 726314). We are an authorised credit broker and not a lender. Always take independent legal advice before entering any credit agreement.
Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.
Tel: 01293 541333
Email: hello@lime-fs.com
Tel: 0207 866 2102
Email: hello@lime-fs.com
Tel: 01293 541333
Email: hello@lime-fs.com
Tel: 0207 866 2102
Email: hello@lime-fs.com
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