Government-backed business loans: what's open to UK limited companies

The government doesn't lend money to small businesses. It guarantees part of a loan a commercial lender makes you, and that guarantee goes to the lender, not to you – if the loan goes wrong, your company still owes the whole balance. That one fact decides how you go about this: you're looking for a lender, not a government department. What's open to a UK limited company in October 2026 is the Growth Guarantee Scheme, which now runs to 31 March 2030, Start Up Loans if you've been trading less than five years, Innovate UK innovation loans, UK Export Finance, and the British Business Bank's regional funds. Every Covid-era scheme has closed.

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What a government guarantee actually does

A government guarantee is a promise to your lender, not to you. Under the Growth Guarantee Scheme the government covers 70% of what's still owed if you default, and only after your lender has run its own recovery process. You stay liable for 100% of the debt throughout.

What the guarantee buys you is a yes you might not otherwise get. It lets a lender back a viable company that doesn't have the assets to secure a loan or the trading history a credit committee would normally want, and for plenty of businesses that's the difference between funding and no funding. It isn't a cheaper loan, a softer loan, or a grant – a government-backed loan is repaid with interest, like any other.

So a government-backed loan is underwritten like any other. Your lender runs its own credit and fraud checks, decides whether to lend, and can ask a director to guarantee the loan personally. The scheme changes what your lender is willing to do, not what you owe.

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Which schemes are open, and which have closed

Five routes are open to a UK limited company as at 14 October 2026, and they do different jobs – one of them isn't a business loan at all.

The Covid-era schemes have all gone, and they're the biggest source of out-of-date advice on this subject. Bounce Back Loans, the Coronavirus Business Interruption Loan Scheme, and its large-business equivalent all closed to new applications on 31 March 2021. The Recovery Loan Scheme that replaced them closed on 30 June 2024, and the Growth Guarantee Scheme took its place. The Enterprise Finance Guarantee, which had run since 2009, closed in 2020.

If you still have one of those loans, it doesn't rule you out of the Growth Guarantee Scheme, but it can reduce the maximum you're allowed to borrow. Scheme support counts as a subsidy, and there's a cap on how much subsidy your group can receive over any rolling three-year period.

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The Growth Guarantee Scheme runs to 31 March 2030

The Growth Guarantee Scheme is the government's main loan guarantee for smaller businesses, and the 2025 Spending Review extended it to 31 March 2030. It isn't a single product: it covers term loans, overdrafts, asset finance, invoice finance, and asset-based lending, and not every accredited lender offers all five.

How much you can borrow depends on which of those you need. A term loan or overdraft runs from £25,001 to £2 million per business group, while asset finance, invoice finance, and asset-based lending start at £1,000. A term loan or an asset finance facility can run from three months to six years, an overdraft or invoice finance facility up to three years. If your company is in scope of the Northern Ireland Protocol the ceiling is £1 million, with lower caps in agriculture and fisheries.

To qualify you need to be trading in the UK, with group turnover of no more than £45 million and more than half of it coming from trading activity. Your business also has to be viable, and not in difficulty or in insolvency proceedings. That turnover limit is going up: the Chancellor announced on 12 July 2026 that it will rise to £54 million, and the scheme runs on its existing terms until accredited lenders put the change in place.

What the scheme doesn't set is the price. Your lender sets the rate and the fees, and the British Business Bank asks only that it takes the benefit of the guarantee into account. There's also one rule that should change how you approach the whole thing: a lender has to offer you an ordinary commercial loan if it can do so on equivalent or better terms. A guaranteed facility isn't a cheaper product you can ask for – it's what you're offered when a standard loan isn't available. If you need less than £25,001, a scheme term loan is closed to you anyway, and micro business loans are a better place to start.

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What your lender can still ask you for

Lenders can take a director's personal guarantee on a scheme facility of any size, at their own discretion and in line with their normal lending practice. The one thing the rules protect is your home: a principal private residence can't be taken as security within the scheme. You may read elsewhere that personal guarantees are barred below £250,000, but that was a Recovery Loan Scheme rule and it didn't carry over. Ask your lender what it will want before you apply.

Beyond that, expect the paperwork of an ordinary commercial loan application: recent accounts and management figures, bank statements, a forecast showing you can service the debt, and credit and fraud checks on the company and its directors. You'll also be asked to confirm in writing that the facility keeps you inside your subsidy limit.

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Start Up Loans are personal loans, not business loans

A Start Up Loan is a government-backed personal loan of £500 to £25,000 at a fixed 7.5% a year, repaid over one to five years. It's branded for business, but the debt is legally yours: you borrow in your own name, and you carry on repaying it if the company stops trading. GOV.UK puts it plainly – 'unlike a business loan, this is an unsecured personal loan'.

Each director can apply for up to £25,000, with £100,000 the maximum across one business. Your company has to have been fully trading for less than five years, you'll be credit-checked personally, and there's no application fee and no early repayment fee. Successful applicants also get up to 12 months of free mentoring.

Because the debt is yours rather than your company's, it's worth weighing against what a new company can borrow in its own name. A start-up business loan from a commercial lender leaves the liability with the business, though a director may still be asked for a personal guarantee.

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Innovation loans, export finance, and regional funds

The other three routes are narrower, and each one exists for a single job.

Innovation loans from Innovate UK run from £100,000 to £5 million, for companies past the early stages of a research and development project who can show the work couldn't be funded another way. They're awarded in competition rounds rather than on demand, and applications are paused until January 2027.

UK Export Finance is the government's export credit agency, and it rarely lends to a small company directly. It guarantees a share of your own bank's risk on export finance facilities and bonds, so the bank can support an overseas order it would otherwise turn down. Of the 937 businesses it supported in 2025/26, 66% were small and medium-sized businesses, and 85% of those were based outside London.

Regional investment funds are run by the British Business Bank through fund managers appointed in each area. They lend from £25,000 to £2 million and invest equity up to £5 million, though not every fund offers all three bands. With the £140m East of England fund opening in September 2026, they now cover every UK nation and region outside London, including the £660m Northern Powerhouse Investment Fund II. Wales and Northern Ireland each have their own fund, alongside their own grant schemes: business loans and grants in Wales and business grants in Northern Ireland.

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How to apply, and who to apply to

You apply to a lender, not to the government – and not to HMRC, which runs none of these schemes. A Growth Guarantee Scheme facility can only come from a lender the British Business Bank has accredited. Its published list ran to 56 lenders on 14 October 2026, from high street banks to asset finance, invoice finance, and community lenders. If a lender that isn't on it offers you a scheme-backed loan, it can't deliver one.

For the rest, the route belongs to the scheme:

• Start Up Loans: apply through the British Business Bank's Start Up Loans service, which will help you put the business plan together.
• Innovation loans: register with Innovate UK's Innovation Funding Service and wait for the next round to open.
• Export finance: start with your own bank, or with an export finance manager at UK Export Finance.
• A regional fund: approach the fund manager appointed for your area.

Read the eligibility rules before you spend time on an application, because every one of these schemes publishes them. And whoever you approach, the decision is theirs: a weak credit file narrows your options rather than closing them, since each lender runs its own checks and sets its own appetite. It helps to see what a lender will see before you start – you can check your business credit score for free with iwoca Credit Compass, which shows your Equifax business credit score and the data behind it.

Expect weeks rather than days, too. Choosing the scheme, getting the figures together, and waiting on a credit decision all take time, and an innovation loan also means waiting for a competition round to open.

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Where iwoca fits, and where it doesn't

We're not an accredited Growth Guarantee Scheme lender, so nothing we lend carries a government guarantee. It's a fair question to ask of any online lender, and that's our answer to it.

A scheme-backed facility is planned borrowing, and everything above is the right process when you're funding something months out. It's the wrong process when what you need the money for already has a date on it.

Access to finance isn't always about needing the money today. Sometimes you need a fast decision because an opportunity appeared, and sometimes you want the funding in place before you use it. An iwoca Flexi-Loan is a business loan with flexible repayment options, built for that gap. A decision is made within 24 hours, though it might be longer depending on the complexity of the request. You then have 30 days to draw the money down, so you can take it when the moment arrives rather than paying for days you don't need. And because repaying early carries no fee, it can be back with us as soon as your own cash arrives – many of our customers only take out our finance for a few weeks, or even days.

iwoca Flexi-Loan in action: VCare24

There's always a gap between delivering care and getting paid by the local authority, and Victoria Simpson's payroll doesn't wait for it. She draws around £200,000 to cover wages, then pays it back within a week as the payments come in.

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That shape helps most when your costs land before your income does: payroll before a big customer pays, a tax bill before your sales catch up, or stock ahead of a season.