The chancellor has announced a new funding package for small and medium-sized enterprises (SMEs) as part of her Mansion House speech in July 2026. Chancellor Rachel Reeves revealed the package, which includes an expansion of the Growth Guarantee Scheme and a portfolio guarantee scheme for exporters.
The Growth Guarantee Scheme provides a 70% government guarantee on commercial loans to SMEs of up to £2 million. The scheme will be scaled up to facilitate an extra £2 billion of SME funding by 2028/29.
The expansion of the Growth Guarantee Scheme is the main event for small businesses. The scheme will see an increase in the maximum loan length from six years to 10 years for loans of up to £1.1 million, and an increase in the maximum size of a loan from £45 million to £54 million.
According to the British Business Bank, this will help an extra 12,000 SMEs by 2028/29. Every £1 spent on the scheme is estimated to support £10 of lending by banks.
A new portfolio guarantee scheme will be launched in spring 2027 to help companies access lending to support exporting and expand into international markets.
Related: Sole Traders Simplify Accounts with Practical Bookkeeping Tips
Jonathan Andrew, CEO of Bibby Financial Services, said: “Extending loan terms and eligibility to include more businesses is a welcome step, particularly at a time when small businesses are facing compounding pressures from within the UK and overseas.”
Andrew also noted that SMEs need to be able to access the right funding for their businesses, which should involve raising awareness of alternative forms of finance that grow in line with a business’ sales.
Lisa Cleaver, COO at eCapital UK, commented: “The expansion of government-backed funding through the Growth Guarantee Scheme is a positive step towards improving access to finance for UK SMEs. However, increasing the availability of funding will not address the awareness gap alone. Businesses also need a clearer understanding of the different funding options available and how they can be used to support their individual needs and long-term growth plans.”
The details of the funding package are still being finalized, but it is expected that the scheme will be open to applications in spring 2027. SMEs that are interested in accessing funding through the scheme should check the government website for more information on small business grants.
They will provide more information.
