Understanding government loan schemes
- 53% of SMEs know how to use government loan programmes
- 48% find the application process challenging
- 1 in 3 businesses would use these loans to purchase assets or improve cash
In today's business environment, understanding and leveraging government loan schemes can be a game-changer for many firms.
Recent data from Close Brothers Asset Finance’s independent research sheds light on how businesses perceive and use these schemes, including the Recovery Loan Scheme (RLS) and the Growth Guarantee Scheme (GGS).
Awareness and understanding
A significant portion of businesses are aware of these government loan programs. According to the data, 58% of respondents have heard about the RLS and GGS. However, understanding how these schemes can be applied to their businesses is slightly lower, with 53% indicating they know how to use them.
Application process
When it comes to the application process, 58% of businesses understand how to apply for these loans, but despite this, nearly half of the respondents (48%) find the application process challenging.
Utilisation of loans
Businesses have diverse plans for utilising government-backed loans. The most common uses include purchasing assets (17%), improving cash flow (16%), and investing in sustainable initiatives such as solar panels and wind power (13%). Other notable uses include training existing staff (12%) and hiring more staff (11%).
British Business Bank loan schemes
Growth Guarantee Scheme (GGS): Supports UK smaller businesses with loans up to £2 million. Offers term loans, overdrafts, asset finance, invoice finance, and asset-based lending. Provides a 70% government-backed guarantee.
Recovery Loan Scheme (RLS): Provided loans up to £2 million for UK businesses to support investment and growth. Included term loans, overdrafts, asset finance, and invoice finance.
Coronavirus Business Interruption Loan Scheme (CBILS): Provided up to £5 million in financial support to UK businesses affected by COVID-19. Included term loans, overdrafts, invoice finance, and asset finance. Offered a government-backed guarantee to lenders, encouraging more lending.
Bounce Back Loan Scheme (BBLS): Provided loans between £2,000 and £50,000 to UK small and medium-sized businesses affected by COVID-19. Offered a 100% government guarantee, fixed 2.5% interest rate, and no repayments for the first year.
Methodology
The findings are taken from research conducted on behalf of Close Brothers Asset Finance by Censuswide in January 2025, involving 901 SME respondents from a cross section of sectors.
