More small businesses to get easier access to finance

Small businesses are at the heart of the UK economy. They create jobs, support local communities and drive innovation. When they have the confidence to grow, everyone benefits. 

For growth to happen, however, small businesses need the funding to turn ideas and ambition into reality. Better access to finance can help make that happen. 

To help small businesses access the finance they need to grow, the Government recently announced a new package of measures designed to increase lending. 

Here we take a closer look at the Government’s commitment to widen access, give lenders more confidence, and offer businesses more options when they're ready to invest in growth.

Small business funding gap 

For too long, many small businesses have been shut out of the lending ecosystem, unable to secure finance through traditional routes.

In the last ten years, however, the lending landscape has changed dramatically. While traditional banks are pulling back from small business lending, alternative lenders are stepping up to bridge the funding gap.

Read more: Where small businesses are finding finance in 2026

The announcement, made by Rachel Reeves on 13th July 2026, strengthens support for alternative lenders, such as Funding Circle. 

The Government estimates that the gap between SME demand for finance and the amount available is between £1.6 billion and £4.1 billion every year. Improved access to finance for small businesses will unlock investment, growth and productivity across the UK. When small businesses succeed, the whole economy thrives. 

Expansion of the Growth Guarantee Scheme

Key among the measures announced is the expansion of the Growth Guarantee Scheme (GGS), which will support an additional £2 billion of small business lending per year by 2028/29. This will more than double annual lending supported by the scheme, from £1.35 billion to £3.35 billion.

First introduced in July 2024, the GGS allows lenders to offer loans backed by a 70% Government guarantee. This reduces the risk of lending to smaller businesses so lenders, like Funding Circle, can say “yes” to more businesses.

In addition, GGS loans will become accessible to more businesses, with the following eligibility changes:

• Increase in maximum loan term, from six years to 10 years for loans up to £1.1 million

• Increase in maximum size of business from £45 million in annual turnover to £54 million, meaning more medium-sized businesses can qualify

The British Business Bank, who run the scheme, estimate that this expansion will support an extra 12,000 businesses per year by 2028/29, on top of the 8,000 currently being supported.

Strengthening support for innovative businesses

Through the British Business Bank’s ENABLE Guarantee programme, £500 million has been allocated to scaling businesses whose value lies in intellectual property rather than physical assets. 

These businesses across sectors such as technology, creative industries and life sciences, have  traditionally had difficulty accessing funding because they don't have property or equipment to use as security.

This new boost will help innovative, high-growth firms to secure the finance they need to commercialise ideas, invest and scale. 

More backing for community finance and underserved businesses 

To help businesses that may struggle to access mainstream finance, the Government will increase the amount of funding available through community lenders. The aim is to unlock an additional £1 billion of SME lending over the next five years.

Eligible small businesses can access this funding through the British Business Bank’s Community ENABLE Funding programme.

New finance for exporters

A new portfolio guarantee scheme will launch in spring 2027, delivered jointly by UK Export Finance and the British Business Bank. 

The goal is to make it easier for small businesses to borrow money to expand into overseas markets.

Wider plans to improve access to finance

In addition to the main points above, the Government also committed to:

• Developing the Business Growth Service to include a financial readiness programme for small businesses

• Consulting on Open Finance, with an initial focus on SME lending

• Removing legislation barriers that stop building societies from lending to small businesses

• Continuing its support for scale-up firms, with a comprehensive package of reforms to unlock finance, including through a New Growth Allowance

Unlocking your business’s potential

At Funding Circle, we’ve been 100% committed to small businesses since we launched in 2010. Our range of products are designed to meet your business needs, from business loans, to lines of credit and business credit cards. We also work with a panel of trusted lenders who offer an array of products, including asset finance, merchant cash advance and invoice financing.

If one of our products isn’t the best fit for your business, your dedicated account manager will help you navigate the available options to find a deal that works for you. 

Apply online in minutes and unlock the finance you need to win.

03/08/26: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.