Tens of thousands of small- and medium-size enterprises (SMEs) in the UK will receive financial support to grow their businesses through an expanded government initiative.
The significant expansion of the Growth Guarantee Scheme means that an additional 12,000 SMEs are projected to obtain £500 million in funding to accelerate innovation and scale up business operations, a news release said.
Since its launch in 2022, the scheme has delivered over £3.7 billion of financing to UK SMEs, the release said. The expansion will provide a 70% government guarantee on commercial loans to SMEs of up to £2 million.
“We know that small businesses are the backbone of this economy and growth in all our regions, and for too long they have heard ‘no’ when trying to raise the funds they need to grow and create jobs across the UK,” Chancellor of the Exchequer Rachel Reeves said in the release. “When they succeed, we all succeed, and today’s major reforms are the most significant step in years to unleash their potential.”
Overall, the scheme will facilitate an additional £2 billion of SME lending per year by 2028–2029, the release said. This will bring the total SME lending supported through the scheme to £3.35 billion per year, more than double the current £1.35 billion, the release said.
Additionally, more business will qualify for government support. The maximum size of businesses eligible for a loan under the scheme has increased from £45 million to £54 million in annual turnover, the release said. The maximum term length of a loan has been extended from six to 10 years for loans up to £1.1 million.
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