Government injects £4.5 Billion to boost small business funding

As part of its newly launched “Backing Your Business” plan, the UK Government has announced a sweeping £4.5 billion funding package to support small and medium-sized enterprises (SMEs). This initiative is being positioned as one of the most comprehensive SME support packages in a generation. The funding will expand several key finance programmes aimed at helping businesses access capital and build resilience.

We break down what’s included in the plan and how it could benefit your business.

Key highlights of the ‘Backing your Business’ plan

This funding package builds on several key finance programmes run by the British Business Bank and its partners, making it easier for small businesses across the UK to access the money they need to grow. Here's a look at what’s included:

• The Growth Guarantee Scheme, a loan guarantee programme launched in 2022, has been extended to 2030. With more than £2.6 billion already delivered to over 16,000 small businesses, this extension gives lenders long term certainty and encourages further lending to viable businesses. The government guarantees 70% of the loan value, giving lenders the confidence to support companies that might otherwise struggle to access finance.

• The Start Up Loans programme will receive an extra £1 billion in lending capacity, aiming to issue up to 69,000 loans to new entrepreneurs over the coming years. With the average loan amount increasing to £15,000, this expansion is expected to support job creation and business growth across the country.

• Also included is a significant increase in the ENABLE Guarantees programme. This scheme, administered by the British Business Bank, is designed to encourage increased lending to smaller businesses by providing partial guarantees to banks and non-bank lenders on portfolios of debt finance. Its capacity has grown from £2 billion to £5 billion, unlocking more lending into the small business economy.

• Additionally, the Regional Angels Programme will receive a £340 million boost to fund early stage startups across the UK’s nations and regions, beyond the traditional investment hubs.

What this means for your business

This £4.5 billion investment means the British Business Bank will have the capacity to invest more than £2.5 billion a year into UK businesses by 2026.

The funding will be distributed through a mix of traditional banks and alternative finance providers. For business owners, this translates into greater access to affordable finance. Whether you're planning to grow, manage cash flow or expand into new areas, now is an ideal time to explore the available support.

At Capitalise, we connect businesses with over 130 UK lenders and offer expert guidance to help you find the right funding solution. Whether you're starting up or scaling up, our funding specialists can help you make the most of this government-backed opportunity.