What is different about the scheme?
Under the Growth Guarantee Scheme, an accredited lender may use a government-backed guarantee to cover 70% of eligible losses, subject to programme terms. That risk-sharing arrangement does not change the borrower’s contractual debt. A standard business loan outside the scheme is also an agreement with a lender, but it is not covered by this programme guarantee.
- A guarantee is not a grant or direct government lending.
- The lender makes the credit decision.
- Scheme eligibility and product availability must be confirmed.
Compare the actual offer
The label alone cannot establish which facility is more suitable or less expensive. Compare the lender’s actual interest rate, fees, repayment profile, term, covenants, security and any personal guarantee. A scheme-backed loan does not automatically have a lower price or more favourable terms.
- Review the complete total cost of credit.
- Check early repayment and default terms.
- Consider how repayments fit expected cash flow.
Security and responsibility
Lenders decide security and personal guarantee requirements case by case, subject to scheme rules. A personal guarantee may be requested at lender discretion, but a principal private residence cannot be taken as security under the scheme. Borrowers should understand that all facility repayments remain their responsibility.
- Ask exactly what assets or guarantees are required.
- The guarantee is between the programme and lender.
- The borrower owes 100% of the debt.