The third iteration of the Recovery Loan Scheme, which is due to end in June 2024 will be extended and renamed as the Growth Guarantee Scheme.
The terms of the scheme will remain unchanged, ensuring continuity and consistency for lenders and the business community.
By providing a 70% guarantee to participating lenders on finance of up to £2 million offered to smaller businesses, the scheme is expected to support 11,000 businesses between 1 July 2024 and 31 March 2026.
The first two iterations of the Recovery Loan Scheme, designed to support access to finance and growth for UK businesses as they recovered from the Covid-19 pandemic, enabled £4.3bn of finance to smaller UK businesses.
The third iteration of the scheme has offered more than £1bn of finance since its launch in August 2022.
Approximately 80% of facilities under the third iteration of the scheme have been offered outside of London, and more than 90% of the businesses supported had fewer than 50 employees.
Louis Taylor, CEO, British Business Bank, said:
“Long-Term Investment for Technology and Science is a potentially game-changing initiative. With the intention of catalysing more than £1bn of funding, including from UK pension funds, LIFTS will support the growth and ambitions of the UK’s most innovative science and technology companies, which with the right finance and support can become the world-beating businesses of tomorrow.
We welcome today’s announcement by the Chancellor, and look forward to concluding agreements with Phoenix Group, Schroders plc and ICG plc, and to working with them as they build towards making their first investments under the initiative by the end of this year.
The Growth Guarantee Scheme will build on the work of the Recovery Loan Scheme, helping smaller businesses to access the right type of finance they need to grow and thrive. This type of guarantee scheme supports lenders in providing a wide range of finance for smaller businesses, and so is a vital ingredient in the smaller business finance landscape.”
