The government has extended the Recovery Loan Scheme (RLS) and rebranded it as the Growth Guarantee Scheme.
In the Spring Budget, Chancellor Jeremy Hunt announced a series of new investment incentives designed to support British businesses, including the new version of the RLS. The latest iteration of the RLS was due to end at the end of June.
The terms of the Growth Guarantee Scheme will be similar to the RLS – participating lenders will benefit from a 70 per cent government guarantee on loans of up to £2m. The scheme is expected to support 11,000 businesses between 1 July 2024 and 31 March 2026.
“The Growth Guarantee Scheme will build on the work of the RLS, helping smaller businesses to access the right type of finance they need to grow and thrive,” said Louis Taylor, chief executive of the British Business Bank.
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“This type of guarantee scheme supports lenders in providing a wide range of finance for smaller businesses, and so is a vital ingredient in the smaller business finance landscape.”
The Chancellor also used the Budget to announce that the British Business Bank will make £250m available under the Long-Term Investment for Technology and Science (LIFTS) initiative. The initiative will aim to create two new investment vehicles that are accessible to pension fund capital, with the intention of unlocking more than £1bn of total private capital to support innovative companies in the UK.
The British Business Bank has already awarded £150m to Schroders Capital under the LIFTSs scheme, to be invested into UK science and tech companies. This investment will be matched by Phoenix Group.
ICG has received the remaining £100m to invest into the UK’s most innovative life sciences companies. This investment will also be matched by Phoenix Group.
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“Long-Term Investment for Technology and Science is a potentially game-changing initiative,” said Taylor.
“With the intention of catalysing more than £1bn of funding, including from UK pension funds, LIFTS will support the growth and ambitions of the UK’s most innovative science and technology companies, which with the right finance and support can become the world-beating businesses of tomorrow.
“We welcome today’s announcement by the Chancellor, and look forward to concluding agreements with Phoenix Group, Schroders and ICG, and to working with them as they build towards making their first investments under the initiative by the end of this year.
