The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. Both use the same core mechanism — a partial government guarantee to accredited lenders, administered by the British Business Bank — but the Recovery Loan Scheme is closed to new lending and the Growth Guarantee Scheme is the current programme, with a focus on growth rather than recovery. If you want government-backed finance today, the Growth Guarantee Scheme is the route.
Key takeaways
- The Growth Guarantee Scheme replaced the Recovery Loan Scheme.
- Both share the same model: a partial government guarantee to accredited lenders.
- The Recovery Loan Scheme is closed to new lending; the Growth Guarantee Scheme is current.
- Existing Recovery Loan Scheme facilities continue under their agreed terms.
- Under the Growth Guarantee Scheme, your main home cannot be taken as security.
- Apply for current government-backed finance through accredited lenders.
If you have researched government-backed business finance, you have probably come across both the Growth Guarantee Scheme and the Recovery Loan Scheme — and wondered how they relate. The short answer is that one succeeded the other: the Growth Guarantee Scheme is the current programme, continuing a lineage of government-backed lending that runs back through the Recovery Loan Scheme to the pandemic-era schemes. This guide explains the relationship, what changed, and what it means for established businesses seeking finance today.
The lineage of government-backed lending
UK government-backed business lending has evolved through a series of schemes, each building on the last. The pandemic brought the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS). As the emergency passed, the Recovery Loan Scheme (RLS) continued government-backed support into the recovery phase. The Growth Guarantee Scheme (GGS) is the latest step, reorienting that familiar guarantee model toward everyday access to finance and growth for smaller businesses.
The shared mechanism
The core of all these schemes is the same: the government provides accredited lenders with a partial guarantee against the outstanding balance of the facilities they provide. This reduces the lender’s risk and encourages it to lend to viable businesses that might otherwise find borrowing harder. In every case, the guarantee protects the lender, not the borrower — you remain fully liable for repaying the debt. The Growth Guarantee Scheme inherits this proven structure from the Recovery Loan Scheme.
What changed from RLS to GGS
For most borrowers, the practical experience is very similar. The main differences are:
| Aspect | Recovery Loan Scheme | Growth Guarantee Scheme |
|---|---|---|
| Status | Closed to new lending | Current scheme |
| Focus | Recovery from the pandemic | Growth and access to finance |
| Mechanism | Partial guarantee to lenders | Partial guarantee to lenders |
| Administered by | British Business Bank | British Business Bank |
| Delivered through | Accredited lenders | Accredited lenders |
The branding shift from "recovery" to "growth" reflects the change in purpose — from crisis response to supporting businesses that are trading and want to grow. The precise rules, limits and timing are set by the current scheme and can be confirmed with an accredited lender.
If you already have a Recovery Loan Scheme facility
Importantly, the move to a new scheme does not affect facilities you already hold. If you have a Recovery Loan Scheme loan, it continues under its agreed terms — you simply repay as normal. The succession affects new applications, not existing borrowing. If you are looking to refinance or borrow again, you would do so under the current Growth Guarantee Scheme through an accredited lender.
Existing scheme facilities aren’t disturbed when a scheme closes to new lending — you keep repaying on your agreed terms. Only new applications use the current scheme.
What it means for borrowers today
If you want government-backed finance now, the Growth Guarantee Scheme is the route, accessed through accredited lenders. The familiar guarantee model means the experience is much like the Recovery Loan Scheme: you apply to a lender, are assessed on affordability and viability, and repay the facility with interest, with the guarantee operating in the background. Your principal private residence cannot be taken as security, and rates are set commercially by lenders, so comparison still matters.
Should you wait for a future scheme?
Government-backed schemes run for defined periods and have a history of being extended or replaced. Because availability and rules can change, and because a current need is best met now, it is generally sensible to apply through the Growth Guarantee Scheme while you are eligible rather than waiting for an uncertain future programme. Confirm the scheme’s current status with the British Business Bank or an accredited lender before applying.
The bottom line
The Growth Guarantee Scheme and the Recovery Loan Scheme are two links in the same chain of government-backed lending — same core mechanism, different era and focus. The Recovery Loan Scheme is closed to new lending and has been succeeded by the Growth Guarantee Scheme, which is the programme to use today. Existing RLS facilities continue untouched, while new borrowing goes through accredited lenders under the current scheme. Understand the lineage, confirm the current rules, and compare lenders to secure the best terms.
Frequently asked questions
Is the Growth Guarantee Scheme the same as the Recovery Loan Scheme?
No, but they are closely related. The Growth Guarantee Scheme is the successor to the Recovery Loan Scheme. Both are government-backed schemes administered by the British Business Bank that provide accredited lenders with a partial guarantee, but the Growth Guarantee Scheme is the current programme.
Did the Growth Guarantee Scheme replace the Recovery Loan Scheme?
Yes. The Growth Guarantee Scheme continued the model of the Recovery Loan Scheme, which itself followed the pandemic-era schemes. The branding shifted from "recovery" to "growth", reflecting a focus on supporting access to finance for growing businesses rather than crisis response.
Can I still apply for the Recovery Loan Scheme?
The Recovery Loan Scheme is closed to new lending, having been succeeded by the Growth Guarantee Scheme. If you want government-backed finance now, the Growth Guarantee Scheme is the route, accessed through accredited lenders.
What is the main difference between the two schemes?
The core mechanism — a partial government guarantee to accredited lenders — is very similar. The main differences are the branding and focus (growth rather than recovery) and the specific rules, limits and timing that apply to the current scheme. Confirm current details with a lender.
Do both schemes use a government guarantee to the lender?
Yes. Both follow the same fundamental model: the government guarantees a percentage of the outstanding balance to the accredited lender, reducing its risk. In both, the borrower remains fully liable for repaying the debt.
What facility types does the Growth Guarantee Scheme support?
Term loans, overdrafts, asset finance and invoice finance, similar to the Recovery Loan Scheme. Not every accredited lender offers every facility, so match the lender to your need.
How much can I borrow under the Growth Guarantee Scheme?
Facilities are available up to a defined maximum per business group (up to £2 million for most UK businesses), subject to scheme rules and the lender’s assessment. Confirm current limits with an accredited lender.
Is my main home protected under both schemes?
Under the Growth Guarantee Scheme, a lender cannot take your principal private residence as security. Borrower protections under the earlier schemes were broadly similar in spirit; for any current borrowing, the Growth Guarantee Scheme rules apply.
I have a Recovery Loan Scheme facility — does this guide affect me?
If you already have a Recovery Loan Scheme facility, it continues under its agreed terms — you simply repay as normal. The move to the Growth Guarantee Scheme affects new applications, not existing facilities.
Why did the government change the scheme name and focus?
The schemes evolved with circumstances — from emergency pandemic support to recovery, and then to growth. Renaming to the Growth Guarantee Scheme signalled a shift toward supporting everyday access to finance and growth for smaller businesses, rather than responding to a specific crisis.
Are the eligibility criteria the same?
They are similar in spirit — UK-based, trading, viable SMEs within a turnover limit and outside excluded sectors — but the precise criteria are set by the current scheme and can change. Always confirm current eligibility with an accredited lender.
Does the change of scheme affect interest rates?
Rates were and are set commercially by accredited lenders under both schemes, not by the government. So the change of scheme does not in itself change pricing; you should compare the total cost of credit between lenders as always.
What other schemes came before the Recovery Loan Scheme?
The Recovery Loan Scheme followed the pandemic-era Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS). The Growth Guarantee Scheme is the latest in this lineage of government-backed lending.
Should I wait for a future scheme or apply now?
Government-backed schemes run for defined periods and can change. If you have a current funding need and are eligible, applying now through the Growth Guarantee Scheme is generally sensible rather than waiting for an uncertain future programme.
How do I apply for the current scheme?
You apply through an accredited lender, or use a broker to identify suitable lenders and compare options. The lender assesses your application under its own criteria within the scheme rules.
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Get your free quoteThis article is general information, not financial advice. Eligibility, rates and terms vary by lender and your circumstances. The Loans Hub is a finance broker, not a lender.
