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How Does the Growth Guarantee Scheme Work?

Arrow growing upwards

If you’re a small to medium-sized property developer in the UK, navigating the financial landscape can be challenging, especially in these uncertain economic times. At BLG Development Finance, we’re committed to helping developers like you grow and thrive. One of the ways we do this is through the Growth Guarantee Scheme (GGS), a British Business Bank and government-backed initiative designed to support UK businesses by improving access to finance. But how exactly does this scheme work, and what can it offer you as a developer? In this article, we will explore all this and more to help you gain a more certain understanding of the Growth Guarantee Scheme’s workings.

 

What is the Growth Guarantee Scheme?

The Growth Guarantee Scheme (GGS) is the successor to the Recovery Loan Scheme and was launched in July 2024. Its primary goal is to provide UK small businesses with the financial backing they need to invest in growth. For property developers, this means access to more favourable loan terms that can help you push your projects forward with confidence.

At BLG, we’re proud to be accredited by the British Business Bank to offer development finance under the GGS. This accreditation allows us to provide our clients with a government-backed guarantee on loans, helping to reduce the risk associated with borrowing and making it easier for developers to secure the funding they need.

 

How Does the Growth Guarantee Scheme Work?

1. Loan Amount and Eligibility

Under the GGS, BLG can provide guaranteed loans whereby up to £2 million per business group for those outside the Northern Ireland Protocol. Higher value non guaranteed tranches up to £15m are available.   If your business falls within the Northern Ireland Protocol, the maximum is £1 million. It’s worth noting that if you’ve previously taken out loans under schemes like CBILS, CLBILS, BBLS, or RLS before June 30, 2024, this won’t prevent you from accessing the GGS. However, it may impact the total amount you can borrow.

 

2. Loan Terms

We offer loans with terms typically ranging from 12 months to 2 years, giving you the flexibility to align your repayment schedule with your project timelines.

 

3. Interest Rates and Fees

Interest rates and fees under the GGS vary based on the specifics of your lending proposal. At BLG, we always strive to offer the best possible terms, taking into account the benefits of the government guarantee. This ensures that you receive competitive pricing tailored to your project’s needs.

 

4. Personal Guarantees and Security

One of the key aspects of the GGS is that personal guarantees may be required at our discretion, consistent with our usual lending practices. However, it’s important to note that your Principal Private Residence cannot be used as security for these loans. This provides an added layer of protection for you as a borrower.

 

5. Government-Backed Guarantee

The GGS offers BLG a 70% government-backed guarantee against the outstanding balance of the facility after our normal recovery process is completed. While this significantly reduces the risk for us as a lender, it’s important to understand that you, the borrower, remain 100% liable for the debt. This guarantee reduces the risk for BLG and allows BLG to offer a high LTV at a competitive price.

 

6. Eligibility Criteria

To qualify for the GGS, your business must meet certain criteria:

  • Turnover: Your business should have a turnover of up to £45 million.
  • UK-Based: Your business must operate within the UK, with at least 50% of your income generated from trading activity.
  • Viability: We need to be satisfied that your business has a viable proposition.
  • No Financial Difficulty: Your business should not be in relevant insolvency proceedings or considered a business in difficulty.
  • Subsidy Limits: You must confirm that receiving a GGS-backed facility won’t push your business over the allowed subsidy limit from publicly funded programs.

 

7. Application Process

When applying for a GGS-backed facility with BLG, you’ll need to provide specific documents that demonstrate your eligibility and the viability of your business. This typically includes financial statements, business plans, and other relevant documentation. Our team will guide you through the process, ensuring that you understand each step and have the support you need to complete your application.

 

Why choose BLG for your Growth Guarantee Scheme loan?

At BLG, we specialise in providing tailored property development finance for UK SME developers. With our accreditation under the Growth Guarantee Scheme, we offer flexible, property-secured loans designed to help your business thrive in a challenging market. We’re committed to supporting British businesses and are here to guide you through the financial options available under the GGS.

Interested in learning more or ready to apply? Contact us today to discuss your needs and see how BLG can support your business growth. Our team is here to help every step of the way.

WHAT OUR CUSTOMERS SAY ABOUT US

"A challenging site like no other with every inch of the plot being built on and 12 apartments built-out through a driveway 2.5m wide off of a main high street with limited access rights, not to mention all the complexities associated with 13 Party Wall Agreements. Most lenders would not have had the vision for the scheme or the confidence in Spiller Builders to build out the scheme.  I just wanted to say how helpful the entire BLG team have been during the build. A very approachable and knowledgeable team, with a “can do” approach to lending. We will be looking to do more business with you for sure."

“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

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