Rachel Reeves' Final Swansong: Billions in New Loans for SMEs

Rachel Reeves is to announce a significant expansion of financial support for small and medium-sized businesses, potentially to the tune of “billions”, before she officially steps down as Chancellor.

Her “swansong” final speech as Chancellor is due to take place on Tuesday, 14th of July, with Andy Burnham expected to take over as Prime Minister as early as the 20th of July and replace the Chancellor with someone new.

The main takeaway is expected to be a £6.5 billion uplift to the Growth Guarantee Scheme (GGS), the UK’s flagship government-backed lending program that provides a 70% government-backed guarantee on loans to small businesses.

Here’s everything you need to know about the shifting funding landscape, including how to prepare your application for the Growth Guarantee Scheme.

Reeves more than doubles the Growth Guarantee Scheme’s funding limit

The government’s pre-briefing of tomorrow’s Mansion House speech has revealed a major cash injection for the GGS. It’s set to facilitate an additional £2 billion of SME lending per year by 2028/2029, bringing its total annual lending capacity to £3.35 billion, more than double the current £1.35 billion limit.

The British Business Bank, which administers the scheme, estimates the changes will support around 12,000 extra businesses per year by 2028 and 2029, representing a 150% increase on the current 8,000 businesses being helped annually.

Key criteria of the loan scheme will be changing too: the maximum term for loans of up to £1.1 million will increase from six years to ten, and the maximum turnover for businesses able to apply will rise from £45 million to £54 million.

Together, these changes will give businesses more breathing room to repay, and open the scheme up to a larger pool of mid-sized firms.

Rachel Reeves framed the changes as central to her economic legacy, announcing the government approach has “put Britain on a stronger footing – restoring stability, getting investment flowing, and delivering reform.”

“When [small businesses] succeed, we all succeed, and today’s major reforms are the most significant step in years to unleash their potential,” Reeves adds.

Beyond the expansion of the loan scheme, several other measures are set to be unveiled in Tuesday’s speech, including the future rollout of a new finance scheme for small export businesses, £500 million in ENABLE Guarantees for IP-rich SMEs, and fresh backing for community lenders that support underserved businesses.

How can small businesses access the expanded scheme?

Unlike other government support schemes, businesses aren’t able to apply to the GGS directly through the government or British Business Bank.

Instead, you apply just as you would for any other loan – through a network of accredited commercial lenders like NatWest, Lloyds, Barclays, alongside smaller and community lenders. If you don’t qualify for the standard terms, the lender can choose to offer the loan under the GGS instead, with the government guaranteeing 70% of it.

Crucially, if you default, the guarantee protects the lender, not the borrower. The scheme doesn’t reduce your obligation to pay it back, or offer any forgiveness.

To be eligible for the GGS, your business needs to:

Be based and trading in the UK
Have an annual turnover of up to £54 million
Have a viable business proposition, even if it doesn’t meet a lender’s standard criteria

Growth Guarantee Scheme checklist: what to prepare before applying

Think you’re eligible? Get your ducks in a row before you approach a lender by ticking off everything on this checklist first.

☐ 2–3 years of accounts or management accounts
☐ Recent bank statements (6–12 months)
☐ Cash flow forecast covering the loan period
☐ A clear explanation of what the loan will be used for
☐ Confirmation that turnover is under £54 million
☐ Up-to-date Companies House filings and no outstanding HMRC issues
☐ A shortlist of accredited lenders to approach

While the application process for the scheme remains unchanged, its recent expansion means it’s an ideal time for eligible businesses to apply, especially those who have previously been turned down for financing.

Still not eligible? Funding may still be in your grasp: consider other options like angel investing and P2P lending instead.