As a business owner about to begin the process of selling your business, it is important to consider how the process itself is likely to impact the business and the people working in it.
As a rule, it is unwise to share with the wider business that you are planning to sell it. Knowledge that something is likely to happen, without knowing what that something is, will inevitably create uncertainty and will distract people from getting on with their work at a time when you really want them to be focused on “business as usual”.
Vendors often find this secrecy uncomfortable. Frequently they will have employees who are not only longstanding colleagues but also friends and it feels as if they are being advised to lie to those friends. The reality is that those colleagues and friends will only worry about the process outcome if they are aware of what is going on and until it is clear what deal will happen and what the plans for the future of the business are going be, there is nothing constructive that you can say to them.
Despite this general advice to keep quiet about the process, you will almost certainly need to bring certain individuals into your confidence to help you meet its requirements. Usually, your most senior finance person will need to be heavily involved even in the preparation stage, providing information to your advisers, helping to populate a virtual data room and supporting the preparation of a financial model that will underpin financial due diligence and help define the bidding EBITDA figure.
If you are planning to offer the business to private equity as well as trade bidders then if you are to achieve an exit and not be locked in, you will need to field a management team who can run the business in your absence and with the ambition to want to grow it and to lock into an equity position. For many founders, this is a key challenge which needs to be planned for well in advance. Though it is perfectly possible to run a “trade only” exit process, private equity buyers widen the field and frequently offer more than trade.
If management are to be actively involved in the process, then they will need to spend time understanding the implications of private equity ownership, to ensure that they can respond effectively to questions about all aspects of the business. As above, this can take their eyes off the “business as usual” ball with unhelpful consequences.
While it is entirely possible to run a process so that most people in the business are unaware of any potential change, there are key people who will need to invest time in preparing for an engaging with the process. Since this needs to happen without any negative impact on the business itself, it requires thought and pre-planning to get right. One thing potential vendors often consider, is rewarding their management teams and key member of their finance and admin support with some kind of exit bonus. It can significantly soften the blow of the additional burden of work that the process itself entails. Equally, with long term planning, many vendors will put shares in the hands of key members of the team through share option schemes, giving them some value to “roll” into a private equity deal or the opportunity to cash something out in a trade deal. Again, this better aligns their interests with yours and makes the extra work they will have to do worthwhile.
As a business owner about to begin the process of selling your business, it is important to consider how the process itself is likely to impact the business and the people working in it.
As a rule, it is unwise to share with the wider business that you are planning to sell it. Knowledge that something is likely to happen, without knowing what that something is, will inevitably create uncertainty and will distract people from getting on with their work at a time when you really want them to be focused on “business as usual”.
Vendors often find this secrecy uncomfortable. Frequently they will have employees who are not only longstanding colleagues but also friends and it feels as if they are being advised to lie to those friends. The reality is that those colleagues and friends will only worry about the process outcome if they are aware of what is going on and until it is clear what deal will happen and what the plans for the future of the business are going be, there is nothing constructive that you can say to them.
Despite this general advice to keep quiet about the process, you will almost certainly need to bring certain individuals into your confidence to help you meet its requirements. Usually, your most senior finance person will need to be heavily involved even in the preparation stage, providing information to your advisers, helping to populate a virtual data room and supporting the preparation of a financial model that will underpin financial due diligence and help define the bidding EBITDA figure.
If you are planning to offer the business to private equity as well as trade bidders then if you are to achieve an exit and not be locked in, you will need to field a management team who can run the business in your absence and with the ambition to want to grow it and to lock into an equity position. For many founders, this is a key challenge which needs to be planned for well in advance. Though it is perfectly possible to run a “trade only” exit process, private equity buyers widen the field and frequently offer more than trade.
If management are to be actively involved in the process, then they will need to spend time understanding the implications of private equity ownership, to ensure that they can respond effectively to questions about all aspects of the business. As above, this can take their eyes off the “business as usual” ball with unhelpful consequences.
While it is entirely possible to run a process so that most people in the business are unaware of any potential change, there are key people who will need to invest time in preparing for an engaging with the process. Since this needs to happen without any negative impact on the business itself, it requires thought and pre-planning to get right. One thing potential vendors often consider, is rewarding their management teams and key member of their finance and admin support with some kind of exit bonus. It can significantly soften the blow of the additional burden of work that the process itself entails. Equally, with long term planning, many vendors will put shares in the hands of key members of the team through share option schemes, giving them some value to “roll” into a private equity deal or the opportunity to cash something out in a trade deal. Again, this better aligns their interests with yours and makes the extra work they will have to do worthwhile.
Access to finance continues to be a pressing concern for many UK small and medium-sized enterprises (SMEs), especially in a landscape shaped by inflation, high operating costs, and cautious lending. That’s why the Chancelor has refreshed its existing support framework through the launch of the Growth Guarantee Scheme (“GGS”), which is an updated version of the Recovery Loan Scheme (“RLS”) and CBILS loan initiatives.
This article offers a summary of the GGS and outlines the key considerations for borrowers when considering it as part of their funding strategy.
Background on the Growth Guarantee Scheme
Administered by the British Business Bank (“BBB”), the GGS is targeted primarily at small and medium-sized enterprises (“SMEs”) across the UK with an annual turnover of up to £45 million. These businesses, who are backbone of the UK economy, often find it challenging to secure finance through traditional commercial routes due to limited collateral, short trading history, or inconsistent cash flows. The scheme is designed to help viable companies overcome these barriers by enabling accredited lenders to offer loans backed by a 70% government guarantee thus reducing the risk for the lender while maintaining commercial decision-making.
Like the RLS and CBILS, crucially, the GGS is not a grant or subsidy. It’s a guarantee to the lender, not the borrower. Businesses remain 100% liable for repayment of the loan, but the presence of the guarantee makes lenders more willing to extend credit to firms that may otherwise be declined. The BBB plays a central role in overseeing the scheme, accrediting lenders, monitoring delivery, and ensuring the programme meets its policy objectives, which include supporting business investment, protecting jobs, and driving regional economic growth.
As with its predecessor, the Growth Guarantee Scheme is a temporary measure with a defined end date, currently scheduled to run until 31 March 2026. It is a key part of the government’s broader efforts to build a more dynamic, innovation-led economy, with SMEs at its core.
Eligibility Criteria
Turnover: Up to £45million (on a group basis)
UK Trading Activity: Over 50 % income from UK-based trade
Viability: A commercially with no insolvency proceedings
Subsidy Limits: Borrowers must confirm they remain within de minimis subsidy thresholds under UK/EU rules viable business proposition
Key Considerations for Borrowers & Lenders
Optimising the £2million cap Borrowers could combine a GGS-backed bilateral a cash flow-based term loan with non-GGS loans funded outside the scheme, (e.g. asset based finance). This modular approach would help to maximise debt capacity above the £2m cap but at the same time the borrower would remain compliant with the requirements of the GGS scheme.
Credit approval process Despite the guarantee, lenders retain full authority over credit assessment, so borrowers must still meet financial health, collateral requirements. BBB does not override lender underwriting standards, nevertheless the guarantee is helpful, particularly in situations where there are no collateral supporting the loan.
Using the Growth Guarantee Scheme to refinance CBILS, BBLS, or RLS Loans
One of the practical features of the Growth Guarantee Scheme is that it allows refinancing of existing government guaranteed loans, including CBILS, BBLS, and RLS, in certain circumstances. This can help businesses restructure their debt, secure better repayment terms, or consolidate facilities to improve cash flow.
Subsidy Awareness Businesses must track other public support to avoid exceeding subsidy caps within a rolling three-year window.
Conclusion
The Growth Guarantee Scheme is a powerful, targeted tool for UK SMEs aiming to scale, invest, or strengthen financial resilience. With a 70 % guarantee for loans of up to £2m and broad product choice, covering term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities, GGS helps to support lending to a segment of the market where there is often limited choice for borrowers.
Strategically combining GGS support with non-guaranteed debt products allows firms to maximise debt capacity while managing lender risk appetite. Critically, applicants must satisfy the lender’s normal credit criteria. However, the presence of the guarantee definitely helps institutions to extend credit to borrowers particularly where there is a shortage of collateral.
How We Can Help
Navigating funding schemes like the GGS can be complex, especially when weighing options across different lenders or structuring applications to meet eligibility and creditworthiness requirements.
We work closely with businesses to:
Assess eligibility and determine whether the GGS is a suitable route to finance.
Compare offers/options from accredited lenders and identify the most appropriate facility – whether term loans, asset finance, or overdraft solutions.
Support the credit process, including preparing the necessary documentation and financial projections.
Provide strategic funding advice, aligning short-term cash flow needs with long-term business goals.
Additionally, through our close relationships with accredited lenders, we offer valuable insight into current lending appetite, decision-making criteria, and sector-specific considerations that can increase the likelihood of a successful application.
If you’re considering applying under the scheme or want to explore your funding options more broadly, please get in touch.
Access to finance continues to be a pressing concern for many UK small and medium-sized enterprises (SMEs), especially in a landscape shaped by inflation, high operating costs, and cautious lending. That’s why the Chancelor has refreshed its existing support framework through the launch of the Growth Guarantee Scheme (“GGS”), which is an updated version of the Recovery Loan Scheme (“RLS”) and CBILS loan initiatives.
This article offers a summary of the GGS and outlines the key considerations for borrowers when considering it as part of their funding strategy.
Background on the Growth Guarantee Scheme
Administered by the British Business Bank (“BBB”), the GGS is targeted primarily at small and medium-sized enterprises (“SMEs”) across the UK with an annual turnover of up to £45 million. These businesses, who are backbone of the UK economy, often find it challenging to secure finance through traditional commercial routes due to limited collateral, short trading history, or inconsistent cash flows. The scheme is designed to help viable companies overcome these barriers by enabling accredited lenders to offer loans backed by a 70% government guarantee thus reducing the risk for the lender while maintaining commercial decision-making.
Like the RLS and CBILS, crucially, the GGS is not a grant or subsidy. It’s a guarantee to the lender, not the borrower. Businesses remain 100% liable for repayment of the loan, but the presence of the guarantee makes lenders more willing to extend credit to firms that may otherwise be declined. The BBB plays a central role in overseeing the scheme, accrediting lenders, monitoring delivery, and ensuring the programme meets its policy objectives, which include supporting business investment, protecting jobs, and driving regional economic growth.
As with its predecessor, the Growth Guarantee Scheme is a temporary measure with a defined end date, currently scheduled to run until 31 March 2026. It is a key part of the government’s broader efforts to build a more dynamic, innovation-led economy, with SMEs at its core.
Eligibility Criteria
Turnover: Up to £45million (on a group basis)
UK Trading Activity: Over 50 % income from UK-based trade
Viability: A commercially with no insolvency proceedings
Subsidy Limits: Borrowers must confirm they remain within de minimis subsidy thresholds under UK/EU rules viable business proposition
Key Considerations for Borrowers & Lenders
Optimising the £2million cap Borrowers could combine a GGS-backed bilateral a cash flow-based term loan with non-GGS loans funded outside the scheme, (e.g. asset based finance). This modular approach would help to maximise debt capacity above the £2m cap but at the same time the borrower would remain compliant with the requirements of the GGS scheme.
Credit approval process Despite the guarantee, lenders retain full authority over credit assessment, so borrowers must still meet financial health, collateral requirements. BBB does not override lender underwriting standards, nevertheless the guarantee is helpful, particularly in situations where there are no collateral supporting the loan.
Using the Growth Guarantee Scheme to refinance CBILS, BBLS, or RLS Loans
One of the practical features of the Growth Guarantee Scheme is that it allows refinancing of existing government guaranteed loans, including CBILS, BBLS, and RLS, in certain circumstances. This can help businesses restructure their debt, secure better repayment terms, or consolidate facilities to improve cash flow.
Subsidy Awareness Businesses must track other public support to avoid exceeding subsidy caps within a rolling three-year window.
Conclusion
The Growth Guarantee Scheme is a powerful, targeted tool for UK SMEs aiming to scale, invest, or strengthen financial resilience. With a 70 % guarantee for loans of up to £2m and broad product choice, covering term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities, GGS helps to support lending to a segment of the market where there is often limited choice for borrowers.
Strategically combining GGS support with non-guaranteed debt products allows firms to maximise debt capacity while managing lender risk appetite. Critically, applicants must satisfy the lender’s normal credit criteria. However, the presence of the guarantee definitely helps institutions to extend credit to borrowers particularly where there is a shortage of collateral.
How We Can Help
Navigating funding schemes like the GGS can be complex, especially when weighing options across different lenders or structuring applications to meet eligibility and creditworthiness requirements.
We work closely with businesses to:
Assess eligibility and determine whether the GGS is a suitable route to finance.
Compare offers/options from accredited lenders and identify the most appropriate facility – whether term loans, asset finance, or overdraft solutions.
Support the credit process, including preparing the necessary documentation and financial projections.
Provide strategic funding advice, aligning short-term cash flow needs with long-term business goals.
Additionally, through our close relationships with accredited lenders, we offer valuable insight into current lending appetite, decision-making criteria, and sector-specific considerations that can increase the likelihood of a successful application.
If you’re considering applying under the scheme or want to explore your funding options more broadly, please get in touch.
