Announced earlier this month, the £500m package has been designed to unlock a significantly larger amount of funding from the British Business Bank’s 50 accredited lenders, with funds available for any legitimate business purpose – including invoice financing, investment in machinery, or restructuring.
The scheme can support loans of up to £2m in most of the UK, or £1m for those in scope of the Northern Ireland Protocol, guaranteeing the lender a 70% government-backed guarantee.
A successor to Covid and post-Covid support schemes such as the Coronavirus Business Interruption Loan Scheme (CBILS), the Bounce Back Loan Scheme (BBLS) and Recovery Loan Scheme (RLS), the GGS is designed to help businesses invest confidently for growth despite the major uncertainties created by US tariffs.
Under US president Donald Trump’s flagship policy, the country has imposed severe tariffs on trade partners across the world in an effort to bolster its own manufacturing base.
While the UK has come out relatively lightly from the arrangement, with just a 10% baseline tariff. However, Trump's measures include a 25% tariff on UK cars, steel and aluminium. The EU will see a 20% baseline tariff imposed in July following a 90-day ‘pause’.
The US is the UK’s largest single-nation trading partner, with exports to the US making up 15.3% of all goods exports. The UK’s car manufacturers have warned MPs they will start cutting jobs within weeks should a better deal not be struck, The Guardian has reported, with Make UK adding that other manufacturing industries could be forced to make redundancies by summer 2025.
“Britain’s manufacturers have hit the brakes on their recruitment and investment plans,” David Bunker, director at independent finance specialist and British Business Bank partner Compass Business Finance told Printweek.
“There is a great deal of uncertainty around the price of materials and machinery, and [the tariffs have hit] confidence levels.
“Confidence has been a factor time and time again in the UK print industry: whenever there has been a decline in the economy, the print industry has been the first to feel it.”
To help businesses through the uncertainty, chancellor Rachel Reeves announced an extra £500m in funding for the GGS in early April.
Viable businesses under £45m turnover that have not already met their subsidy limits under CBILS, BBLS and RLS, and that are not in difficulty can qualify for the funding, which some lenders like Compass are using to support wider loans.
The loans can prove particularly useful to print companies, Bunker added, because they tend to be highly leveraged with equipment in the race to keep up with technological developments.
“It’s a very positive step,” he said.
“Uncertainty is always a concern for businesses that are highly leveraged – and printers are highly leveraged, they have to borrow a lot of money to do what they do.
“But what we’re trying to do with the GGS is help businesses navigate their way through some of the uncertainty.
A lot of businesses have been looking for cash support while they go for growth, Bunker emphasised.
“Businesses need to invest to stay relevant, but if you’re gong to invest £2m, you need to know that you’ve got the confidence to do it, so you need to have that working capital sitting there to support the increase.
“And unless you’re a business with a till, the busier you get, the quicker your cash will disappear because of that cash flow cycle, where they’re only getting their money after they have paid their creditors.
“A lot of our facilities at the moment are raising cash, either through loans or through refinance, or through invoice finance.”
