A SaaS company can face cash flow pressure while investing ahead of contracted recurring revenue. Product development, delivery hires and enterprise contract mobilisation often require cash before customer payments arrive. The Growth Guarantee Scheme may support suitable growth funding, subject to lender approval. This guide explains the scheme, lender assessment, facility choices, costs and the evidence needed before you approach the market.
Why GGS Matters for Software and SaaS Growth
Software businesses often invest before new revenue converts into cash. Development salaries, cloud infrastructure and implementation costs can build while enterprise customers follow longer payment cycles.
The Growth Guarantee Scheme (GGS) can support established UK businesses seeking finance for investment and growth. We position the scheme as growth funding, rather than a response to emergency liquidity.
Recurring revenue can strengthen your commercial case when contracts and collections support repayments. It does not guarantee that a lender will lend or apply Scheme support.
This guide covers how GGS works, which structures fit SaaS companies and where further borrowing is unsuitable. It also covers application preparation and how to compare finance broker services when weighing your options for SME lending.
What the Growth Guarantee Scheme Is
The Growth Guarantee Scheme is a UK government-backed programme supporting UK businesses that want to invest and grow. The British Business Bank administers it on behalf of the Secretary of State for Business and Trade.
GGS supports facilities of up to £2 million per business group under the general maximum. Full scheme detail is published on the British Business Bank Growth Guarantee Scheme page. The £2 million figure is the scheme maximum, not an expected offer or automatic entitlement.
Scheme structural details
The BBB Marketing Toolkit requires these scheme details to be stated in GGS content:
- Facility sizes: £25,001 to £2 million for term loans and revolving credit facilities. £1,000 to £2 million for asset finance and invoice finance
- Interest rate cap: 14.99% to 21.99% Max AER, depending on the Accredited Lender
- Term: Following the 12 July 2026 Chancellor announcement, term loans and asset finance facilities can run up to 10 years (extended from six) as this is operationalised by Accredited Lenders. Revolving credit facilities and invoice finance remain up to three years
- Turnover cap: Currently £45 million, increasing to £54 million as the July 2026 announcement is operationalised by Accredited Lenders
- Principal Private Residence exclusion: Lenders cannot take a personal guarantee secured against your principal residence
- Subsidy limits: £315,000 rolling three-year cap for Great Britain Borrowers. £255,000 for Northern Ireland Borrowers. £42,500 for Northern Ireland agricultural borrowers. £25,500 for Northern Ireland fishery borrowers
- Excluded sectors: Coal, lignite, oil and gas primary extraction. Certain agricultural activities in Northern Ireland. Banks, building societies, insurance companies (insurance brokers excepted), public-sector bodies, and state-funded schools
The scheme is extended to 31 March 2030 (confirmed in the 2025 Spending Review by the British Business Bank). On 12 July 2026, the Chancellor announced a £6.5 billion increase in scheme capacity, which the British Business Bank estimates will help 33,000 UK businesses. As of 31 March 2026, the scheme had delivered £3.64 billion to UK businesses. More recent figures may be available on the British Business Bank Growth Guarantee Scheme page. Check the current scheme status before making a funding decision.
How the Government Guarantee Works
The government provides the lender with a 70% guarantee against the outstanding facility balance. The guarantee applies after the lender completes its normal recovery process. Your company remains responsible for repaying the full drawn amount, interest and applicable fees. The guarantee does not compensate your company or reduce its contractual debt.
Each Accredited Lender applies its own credit policy within the scheme rules. It assesses your business proposition, viability, repayment affordability and available security before deciding whether to lend. An eligible business can still receive a decline. It may also receive a smaller facility than requested or an offer with lender-specific conditions.
Facilities Supported by GGS
GGS supports several forms of business borrowing:
- Term loans: A defined amount repaid under an agreed schedule
- Revolving credit facilities: Flexible borrowing up to an agreed limit, subject to lender conditions
- Asset finance: Funding linked to an eligible asset purchase, such as equipment
- Invoice finance: Funding against eligible unpaid B2B invoices
- Asset-based lending: A facility supported by several eligible asset classes, which may include receivables and physical assets
The right structure depends on the funding purpose, cash flow profile and evidence available. A SaaS company should match the repayment structure to the expected timing of customer cash receipts.
Scheme Eligibility for UK Software and SaaS Companies
Software, IT, digital and creative businesses are among the industries covered by the government’s scheme information. Sector inclusion allows consideration under GGS, but it does not replace lender underwriting.
Government information covers start-ups with one to two years of trading and established businesses. Business age alone does not determine approval.
Core Scheme Criteria
The scheme criteria require the applicant to:
- Trade in the UK
- Have turnover not exceeding £45 million (increasing to £54 million as the July 2026 announcement is operationalised)
- Generate more than 50% of turnover from trading activity
- Present a viable business proposition
- Avoid classification as a business in difficulty
- Avoid relevant insolvency proceedings
The turnover cap applies across the business group where the applicant belongs to a group. Related companies therefore need a combined assessment. A lender may apply additional requirements under its credit policy. Meeting the scheme criteria provides access to consideration, rather than a right to funding.
What SaaS Lenders Need to Understand
A SaaS company should explain the quality and predictability of its revenue. Annual recurring revenue (ARR) means recurring subscription revenue measured over a year. Monthly recurring revenue (MRR) measures it over a month.
ARR and MRR are commercial measures, not formal scheme criteria. Present supporting records that reconcile reported recurring revenue with contracts, invoices, bank receipts and management accounts.
Your evidence should explain:
- Contracted ARR or MRR and how it is calculated
- Historical and current customer churn
- Renewal dates and contract renewal terms
- Customer concentration and reliance on major accounts
- Signed contracts, order forms and delivery obligations
- Cash runway under the base forecast
- The effect of the proposed repayments on working capital
- The expected return from product development, recruitment or contract mobilisation
Lenders may examine whether recurring revenue remains stable after cancellations, discounts and failed collections. They may also consider implementation obligations before recognising contracted revenue as dependable cash flow. A company with limited trading history should test whether its records support viability and affordability. Forecasts need clear assumptions, signed commercial evidence and a credible repayment plan.
GGS Funding Structures and SaaS Use Cases
The funding purpose should determine the facility structure. Match the product to the asset, invoice or cash flow need behind the request.
Term Loans and Revolving Credit Facilities
A term loan can fund a defined investment with a measurable commercial purpose.
How it works: The lender advances an agreed amount and sets a repayment schedule. Pricing, term, security and conditions depend on the lender’s assessment.
This can suit product development, planned recruitment or contract mobilisation where forecast cash flow supports regular repayments. It does not fit an open-ended cash requirement without a repayment route.
Who this fits: An established SaaS company with a costed growth plan, supporting contracts and sufficient cash flow for scheduled repayments.
A revolving credit facility can support short-term fluctuations between payments and operating costs.
How it works: The lender agrees to a borrowing limit that flexes with the company’s requirements. Availability, review terms, and security remain lender-specific.
This works well where enterprise invoices create temporary working capital gaps. It provides weaker alignment where the company needs long-term development capital.
Who this fits: A UK trading business with recurring cash receipts, short timing gaps and clear control over its working capital cycle.
Invoice and Asset-Based Funding
Invoice finance releases cash against eligible unpaid B2B invoices. Pure subscription revenue without invoices does not automatically create an eligible debtor book. Our invoice factoring vs invoice discounting guide covers the differences between the two main invoice finance routes.
How it works: The lender assesses eligible receivables and the creditworthiness of the customers that owe them. Advance terms and fees depend on the provider.
This can fit a SaaS business billing enterprise customers through invoices. It may support working capital during extended payment terms or implementation projects.
Selective invoice finance can fund chosen invoices, projects or debtors instead of the whole sales ledger. Debtor creditworthiness remains central to underwriting.
Who this fits: A SaaS company with eligible B2B invoices, creditworthy customers and reliable sales-ledger records.
Asset finance links borrowing to an equipment purchase.
How it works: The financed asset supports the facility. Product terms, deposits, ownership arrangements and security depend on the lender and asset.
This suits servers, specialist hardware or other eligible business equipment. It does not convert general software development expenditure into an asset purchase.
Who this fits: A software company buying identifiable equipment for commercial use.
Asset-based lending can draw support from several asset classes beyond receivables.
How it works: The lender assesses eligible assets, which can include the debtor book, stock, plant, machinery or commercial property.
This structure has limited relevance for an asset-light SaaS company without eligible receivables or physical assets. It can fit a wider technology group with a substantial debtor book and equipment.
Who this fits: A business with several eligible asset classes and finance records capable of supporting ongoing lender monitoring.
| GGS-Supported Structure | Potential SaaS Use | Key Commercial Evidence | When It Does Not Fit |
| Term loan | Product development, planned recruitment or contract mobilisation | Management accounts, forecasts, contracts and repayment plan | Cash flow cannot support scheduled repayments |
| Revolving credit facility | Short-term working capital during enterprise sales or payment cycles | Bank statements, cash flow forecast and payment history | The requirement is long term or structurally recurring |
| Invoice finance | Funding against eligible unpaid B2B invoices | Sales ledger, invoices, contracts and debtor quality | Revenue is collected only through subscriptions without eligible invoices |
| Asset finance | Eligible equipment purchases | Asset details, supplier information and business purpose | The requirement concerns general development expenditure |
| Asset-based lending | Funding supported by receivables and other eligible assets | Asset records, debtor information and management accounts | The company lacks suitable assets or monitoring capability |
Where GGS Does Not Fit
GGS is unlikely to help where borrowing only postpones an underlying inability to meet liabilities. It also does not fit when proposed repayments remain unaffordable.
A business in relevant insolvency proceedings does not meet the core scheme criteria. Directors facing distress should seek independent professional advice before considering further debt.
The facility must also match the commercial need. Asset finance does not suit payroll expenditure, while invoice finance requires eligible receivables.
Pricing, Security and Personal Guarantees
GGS does not set a universal interest rate for every borrower. Lenders price each facility according to risk, structure, security and affordability, subject to the scheme’s 14.99% to 21.99% Max AER cap.
What the 70% Guarantee Does Not Cover
The 70% government guarantee protects the lender. Your company remains liable for the full debt and must meet every repayment under the facility agreement. GGS borrowers do not have to use their principal private residence as security. A lender can still request business security or a personal guarantee where its policy permits.
A personal guarantee is a director’s contractual promise to repay specified business debt if the company fails to do so. Its scope and enforcement terms depend on the legal documents. A personal guarantee should not be treated as a standard formality. Directors should understand the guaranteed amount, any cap and the circumstances that can trigger a demand.
Costs and Security to Discuss Before Applying
Ask the lender or broker these questions:
- Is the interest rate fixed or variable?
- What is the complete repayment profile?
- What fees apply before and during the facility?
- Which business assets support the borrowing?
- Does the lender require a personal guarantee?
- What financial or operating covenants apply?
- Which conditions must be met before drawdown?
- What happens if trading performs below the submitted plan?
| Decision Area | What to Confirm | Why It Matters for a SaaS Business |
| Pricing | Fixed or variable pricing within the scheme’s 14.99% to 21.99% Max AER cap | Variable costs affect runway and forecast debt service |
| Fees | All arrangement, drawdown, guarantee-related and ongoing fees | Upfront deductions can reduce usable growth capital |
| Repayment structure | Payment frequency, repayment profile and early repayment terms | Repayments must align with subscription collections and enterprise payment cycles |
| Business security | Assets covered, ranking and release conditions | Security can restrict later borrowing or asset disposal |
| Personal guarantees | Required amount, cap, scope and trigger conditions | A guarantee creates a personal contractual exposure for a director |
| Lender conditions | Covenants, reporting duties, drawdown requirements and underperformance terms | SaaS forecasts can change after churn, delayed launches or slower contract conversion |
Compare the total cost, usable proceeds and repayment obligations. A lower headline rate may still accompany fees, security requirements or restrictive conditions.
Growth Capital, Venture Debt and GGS Compared
GGS supports access to finance for smaller UK businesses seeking investment and growth. A GGS-backed facility remains debt and requires repayment. The central decision is whether forecast cash flow can support fixed debt commitments. Contracted revenue can inform that assessment, but ARR, MRR and existing investors do not ensure qualification.
A standard business loan provides debt without the GGS guarantee. Venture debt usually targets growth companies and still creates repayment obligations, often alongside lender-specific conditions. Equity or growth capital brings ownership capital into the business. It avoids scheduled loan repayments, but investors receive an ownership interest and associated rights.
| Route | Repayment Commitment | Ownership Impact | Best Decision Question | GGS Relevance |
| GGS-backed debt | Contractual repayments remain due in full | No automatic ownership transfer | Can predictable cash flow support the proposed debt throughout the term? | The lender receives a 70% government guarantee |
| Standard business loan | Contractual repayments under the loan agreement | No automatic ownership transfer | Does an ordinary facility provide suitable terms without scheme support? | None |
| Venture debt | Contractual debt repayments and lender-specific conditions | Depends on the facility documents | Can the company carry debt while pursuing a high-growth plan? | None unless an Accredited Lender confirms an eligible GGS structure |
| Equity or growth capital | No scheduled loan repayment | Investors receive an ownership interest | Does the business need ownership capital rather than fixed debt? | None |
Consider the funding purpose, timing, available security and revenue predictability. Model the consequences of slower sales, increased churn and delayed customer payments before selecting fixed debt.
Preparing a Strong Application
A lender needs evidence that connects the funding request to a viable growth plan. Prepare that evidence before submitting formal applications.
Build the Evidence Pack
Use this numbered checklist as a starting point:
- Prepare current management accounts, including a profit and loss account and balance sheet
- Provide a business plan that explains the growth objective and funding purpose
- Gather recent business bank statements
- List asset details where the proposed structure depends on equipment or other assets
- Confirm previous government subsidies and relevant publicly funded support
- Reconcile ARR and MRR reporting with contracts, invoices and cash receipts
- Provide customer contracts, signed order forms and renewal information
- Analyse churn, retention and customer concentration
- Prepare cash flow forecasts with clear assumptions
- Explain how the company will meet repayments under its base forecast
These are standard documents rather than a universal scheme checklist. Lenders verify debtor creditworthiness through Companies House and commercial credit references.
A borrower receiving publicly funded subsidy may need written confirmation that the proposed facility stays within applicable subsidy limits. The lender will explain which confirmation it requires.
Reduce Unnecessary Applications
Multiple poorly targeted applications can consume management time and create inconsistent lender records. Assess fit before submitting full applications.
We use soft credit checks for an initial fit assessment. A soft check can help direct a borrower towards lenders whose criteria appear relevant.
A soft check does not replace underwriting. The selected lender will conduct its own assessment and may require further credit checks, documents or explanations.
Present one consistent funding request across your business plan, forecasts and application forms. Explain changes in revenue, margins, churn or customer concentration before a lender raises them.
What the Application Process Looks Like
The process usually follows these stages:
- Define the amount, purpose and preferred facility structure
- Test whether the company meets the core scheme criteria
- Prepare the financial and SaaS evidence pack
- Assess lender appetite and likely structure
- Submit an application to an appropriate Accredited Lender
- Respond to underwriting questions and document requests
- Compare any offer’s cost, security and repayment terms
- Review and sign the facility documents after appropriate advice
The lender may approve, decline or amend the request. It can propose a different amount or structure where the original request does not fit.
Once your evidence and repayment rationale are ready, consider speaking to a broker about your finance options. This can help identify suitable lenders without assuming approval.
How to Compare Finance Broker Services for SME Lending
There is no universal winner for every UK SME. The right service depends on your required product, internal resources and the complexity of your funding case.
A debt-only requirement calls for a different route from a search covering equity or grants. Accountant-led support may suit businesses that want credit information integrated into financial advice.
Broker service models in the UK market
UK SME finance broker services generally fall into four categories:
Matching platforms
Broad marketplaces that ask for funding requirements, annual revenue and business age, then present potential matches across loans, equity and grants. These suit early-stage research where you want to see the range of routes available before selecting one.
Credit-scoring platforms
Services that pair credit profile data with funding matching. These position matching as an alternative to submitting multiple applications. Vendor claims about approval volumes and lender panels require current verification against the provider’s own published data.
Debt-focused credit brokers
Services focused on debt and asset-backed finance, with stated scope excluding equity investment, angel networks, venture capital and government grants. These suit borrowers who have decided debt is the right route.
Specialist commercial finance brokers
Services that combine market access with hands-on case preparation, including assessment of recurring revenue, customer concentration, security position and lender presentation. These suit complex or larger applications where the case needs to be constructed carefully.
At Funding Bay, we work with UK SMEs across a panel of over 200 UK lenders. This panel covers the full UK commercial finance market. Where clients are considering finance with Scheme support, we submit applications to Accredited Lenders, who decide whether Scheme support applies. The scheme currently operates through 70 Accredited Lenders, which is a subset of our wider panel.
Outside the scheme, we arrange commercial finance facilities from £20,000 to £25 million. Products include business loans, invoice finance, asset finance, revolving credit facilities, bridging finance and commercial mortgages.
Funding Bay is remunerated by lenders where an application results in a successful facility. Commission arrangements are disclosed in the broker documentation at application. Fees charged to clients are fully and clearly disclosed at application and are no higher than comparable commercial loan arrangements outside any specific scheme.
What a SaaS Borrower Should Compare
Compare each route against the same commercial questions:
- What is the total borrowing cost, including all fees?
- Can forecast cash flow support the repayment profile?
- Does the lender understand contracted recurring revenue?
- How does the lender assess churn and customer concentration?
- What business security or personal guarantee is required?
- Does the service cover equity or grants if debt is unsuitable?
- Which credit checks and data-sharing permissions apply?
- Who prepares the funding case and handles lender questions?
- How clearly does the service disclose fees and commission?
Choose the route that fits the funding purpose and evidence. A broad marketplace may suit early research, while a specialist broker may suit a nuanced or larger application.
The Bottom Line
GGS merits consideration when your company trades in the UK and has a viable growth case. You also need affordable repayments, a suitable facility structure and a complete evidence pack. The scheme can support investment and growth, but every lender retains discretion. Approval, pricing, security and personal guarantee requirements depend on the borrower and facility.
Check your current position before approaching lenders. Define the purpose, test downside affordability and prepare consistent financial records before speaking to a broker. Use our Compare My Funding tool to see which lenders on our panel may be a fit for your business in minutes. The tool uses a soft credit check that will not affect your credit file.
Funding Bay is authorised and regulated by the Financial Conduct Authority (Firm Reference Number 950847).
When Finance Is Not the Answer
Further borrowing is unsuitable if the company cannot support repayments or already struggles to meet liabilities. It is also unsuitable during relevant insolvency proceedings.
Directors should seek independent support where financial distress affects the company. Sources include Business Debtline, the Insolvency Service or an SRA-regulated solicitor.
An accountant regulated by ICAEW, ACCA or the Chartered Institute of Taxation can also help assess the company’s financial position. This article does not provide legal, tax, insolvency or debt advice.
Funding Bay is remunerated by lenders where an application results in a successful facility. Commission arrangements are disclosed in the broker documentation at application. Fees charged to clients are fully and clearly disclosed at application and are no higher than comparable commercial loan arrangements outside any specific scheme.
