Billions unlocked for small businesses: what it means for you

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Former chancellor Rachel Reeves announced on 13 July 2026 that the Growth Guarantee Scheme will be significantly expanded, making it easier for small businesses to access loans of up to £2 million
An extra 12,000 businesses a year will benefit by 2028-29
Loan terms will be extended from six to 10 years and eligibility widened to firms with up to £54 million in annual turnover

If you’ve ever been turned down for a business loan, this announcement could change things.

On 13 July 2026, Rachel Reeves (former chancellor) unveiled what the government is calling the most significant reforms to small business finance in years. The changes are designed to close a funding gap estimated at between £1.6 billion and £4.1 billion a year – money that small businesses need but can’t currently get.

Here’s what’s changing, and what it could mean for your business.

What is the Growth Guarantee Scheme and how does it work?

The Growth Guarantee Scheme (GGS) is run by the British Business Bank (BBB). It gives lenders a 70% government guarantee on commercial loans to small and medium-sized businesses (SMEs) of up to £2 million. This essentially means, the government takes on most of the risk, so lenders are more likely to say yes to businesses they’d otherwise turn down.

Since launching in 2022, the scheme has delivered over £3.7 billion in financing to UK SMEs – with £2.5 billion of that reaching businesses outside London and the south east. Every £1 spent on the scheme supports around £10 of lending by banks.

more lending capacity – the scheme will support an extra £2 billion of SME lending a year by 2028-29, bringing the total to £3.35 billion – more than double the current £1.35 billion
longer loan terms – the maximum term length for loans of up to £1.1 million increases from six to 10 years, giving businesses more time to repay
wider eligibility – businesses with annual turnover of up to £54 million (up from £45 million) will now qualify
more businesses supported – the BBB estimates these changes will support an extra 12,000 businesses a year by 2028-29 – a 150% increase on the current 8,000

What’s changing with small business loans under the new reforms?

The GGS is being expanded significantly. Here’s what’s new:

more lending capacity – the scheme will support an extra £2 billion of SME lending a year by 2028-29, bringing the total to £3.35 billion – more than double the current £1.35 billion
longer loan terms – the maximum term length for loans of up to £1.1 million increases from six to 10 years, giving businesses more time to repay
wider eligibility – businesses with annual turnover of up to £54 million (up from £45 million) will now qualify
more businesses supported – the BBB estimates these changes will support an extra 12,000 businesses a year by 2028-29 – a 150% increase on the current 8,000

Martin McTague, National Chair of the Federation of Small Businesses (FSB), said: “Access to finance is a fundamental need for small businesses looking to grow, so we are pleased to see our calls to amp up the British Business Bank’s Growth Guarantee scheme have been heard.

“Expanding resources and extending payment terms will help small businesses build wealth in every part of the country. Small firms need as many finance options available to them as possible right now.”

What other support is available for small businesses?

Beyond the GGS expansion, the government announced several other measures worth knowing about.

Support for innovative businesses: The BBB has allocated £500 million to help SMEs with valuable intellectual property (IP) – such as those in the creative industries and life sciences – access finance. These businesses often struggle to borrow because they don’t have physical assets like property to offer as security.

Community finance: Businesses that struggle to access mainstream lending can turn to Community Development Finance Institutions (CDFIs). The government has committed to unlocking an extra £1 billion of SME lending through CDFIs over the next five years, supported by £10 million in philanthropic funding from partners including JPMorganChase.

Export support: A new joint scheme from UK Export Finance and the British Business Bank will launch in spring next year, helping smaller businesses access finance for export activity and international expansion.

What does this mean for your small business?

If you’ve struggled to get a loan – or been put off applying – the expanded scheme could tip the scales in your favour. Longer repayment terms mean lower monthly outgoings, while broader eligibility means more businesses qualify. And if you’ve been turned away by a high street lender before, it’s worth knowing that CDFI lenders exist specifically to help businesses in that situation.

But remember that business loans can come with high interest rates and long repayment terms. If you take out a business loan and then struggle to pay it back, this could have a negative impact on your business.

This article is intended as a guide and not financial advice. You should always seek the help of a professional if you’re not sure of anything.

Frequently asked questions

Who is eligible for the Growth Guarantee Scheme?

SMEs with annual turnover of up to £54 million. The scheme covers loans of up to £2 million, with the government backing 70% of the credit risk.

How long can a Growth Guarantee Scheme loan last?

From 2026, loans of up to £1.1 million can now run for up to 10 years – up from the previous six-year maximum.

Where can I apply for a Growth Guarantee Scheme loan?

Applications are made through accredited lenders, not directly through the government. Visit the British Business Bank website for a list of participating lenders. Make sure to check any eligibility criteria and loan terms before you apply.

What do I need to consider when looking at business loans?

Before taking out a business loan, think about whether you can comfortably manage the repayments based on your cash flow. Compare interest rates, fees, and repayment terms across lenders – these can vary a lot. Also check the eligibility criteria, whether you need collateral, and whether the loan suits your short or long-term goals.

What if I’ve already been turned down for a loan?

Consider approaching a CDFI lender. The Community Finance Taskforce is actively working to connect rejected applicants with alternative lenders. Always make sure you can afford paying back a loan and its interest by checking the loan terms before you apply.

More funding guides for small businesses

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