The Chancellor, Rachel Reeves, has announced an expansion of the British Business Bank’s (BBB) Growth Guarantee Scheme (GGS). This provides a 70% government guarantee on commercial loans to SMEs of up to £2 million, cutting credit risk.
The changes will enable the scheme to scale up with an additional £2 billion of Small to Medium-sized Enterprises (SME) lending per year by 2028/29. This will bring the total lending supported through the scheme to £3.35 billion per year, more than double the current £1.35 billion.
It will also increase the maximum term length of a loan from six to 10 years for loans of up to £1.1 million and increase the maximum size of businesses eligible for a loan under the scheme from £45 million in annual turnover to £54 million.
The British Business Bank estimates these changes will support an additional 12,000 businesses per year by 2028/29, a 150% increase on the 8,000 currently being supported, bringing the total to 20,000. Since its launch in 2022, the scheme has delivered over £3.7 billion of financing to UK SMEs, with £2.5 billion of this reaching businesses outside of London and the Southeast.
It is claimed that every £1 spent on the scheme is estimated to support around £10 of lending by banks.
The government is consulting on potential measures that target Electronic Sales Suppression (ESS). Proposals include the introduction of new software standards for Point of Sale systems. Electronic Sales Suppression (ESS) involves businesses using software or devices to manipulate Electronic Point of Sale (EPOS) systems to hide transactions and evade tax.
The June 'UK Report on Jobs' shows subdued business confidence driving a preference for short-term staff. Temporary staff billings rose at the steepest rate in over three years, while permanent staff appointments continued to decline, although at a much slower pace than in May.