Chancellor Rachel Reeves is set to announce a major expansion of financial support for small and medium-sized enterprises (SMEs) in what is expected to be her final Mansion House speech on Tuesday. The flagship measure involves extending the Government's guarantee on commercial loans for SMEs, which could unlock billions of pounds in borrowing for British businesses.
Growth Guarantee Scheme Expansion
The Growth Guarantee Scheme (GGS) currently provides a 70% Government guarantee on loans to small businesses. Since its launch in 2022, it has delivered more than £3.7 billion to SMEs across the UK. The new expansion will inject an additional £6.5 billion into the scheme, which the British Business Bank estimates will support 33,000 businesses over the next three years.
Key changes include extending the maximum loan term from six to ten years and raising the turnover threshold for eligible businesses from £45 million to £54 million. This will allow a wider range of medium-sized firms to access the scheme.
Chancellor's Statement
Ms Reeves said: "Our plan for the economy has put Britain on a stronger footing – restoring stability, getting investment flowing, and delivering reform. We know that small businesses are the backbone of this economy and growth in all our regions, and for too long they have heard 'no' when trying to raise the funds they need to grow and create jobs across the UK. When they succeed, we all succeed, and today's major reforms are the most significant step in years to unleash their potential."
Political Context
The announcement comes as Ms Reeves is not expected to remain as Chancellor under a potential future government led by Andy Burnham. In a separate interview with the BBC, she warned that Mr Burnham must have a "worked-through plan" for governing Britain when he enters Downing Street, adding that "governing is hard in Britain, and lots of challenges and shocks will come his way."
