Third Iteration of Recovery Loan Scheme Deemed ‘Important Intervention’ by British Business Bank

The British Business Bank recently released data on the third iteration of its Recovery Loan Scheme, showcasing its success in driving growth for UK small and medium-sized enterprises (SMEs).

Launched in August 2022, the scheme aimed to provide government-backed credit guarantees to support UK businesses in their investment and growth endeavors. With a total lending offering exceeding £1.3 billion, over 6,000 smaller UK businesses have already accessed more than £1.15 billion in finance through the scheme.

Targeting businesses with a turnover of up to £45 million, the Recovery Loan Scheme provides access to finance that may not have been available through traditional commercial means. This financial support can be used for various purposes, such as managing cash flow, investing in new equipment or vehicles, supporting the transition to a net-zero economy, or funding the growth of products and services.

The British Business Bank revealed that over 90 percent of the guaranteed facilities supported businesses with fewer than 50 employees, with more than 65 percent going to businesses with fewer than 10 employees. While the scheme assists firms with turnovers up to £45 million, the focus remains on smaller businesses, with over 87 percent of the guaranteed facilities supporting businesses with turnovers of less than £5 million.

Reinald de Monchy, managing director of guarantee and wholesale solutions at the British Business Bank, emphasized the importance of the Recovery Loan Scheme in providing growth and working capital across various regions. He also mentioned the upcoming transition of the scheme into the Growth Guarantee Scheme in Summer 2024.

More than half of the finance drawn from the scheme has been allocated for business investments and growth initiatives, with a third designated for working capital. The previous phases of the scheme, focused on aiding businesses in their post-pandemic recovery, provided £4.3 billion in finance.

Due to its success, Chancellor of the Exchequer Jeremy Hunt announced an extension of the scheme until 31 March 2026, renaming it the Growth Guarantee Scheme. This extension will continue to support UK businesses in their growth and recovery efforts.