Growth Guarantee Scheme lending surges as challengers outpace the big banks

The Growth Guarantee Scheme, the successor to the Recovery Loan Scheme, launched in July 2024 to provide continued support for UK businesses seeking finance during a period of high borrowing costs and economic uncertainty. 

Surge in both drawn values and facilities in the last year

The analysis of the latest data from British Business Bank shows that cumulative totals in Q2 of this year hit £2.6 billion in lending across more than 16,000 facilities, compared with £1.45 billion and 9,083 facilities a year earlier.

Challenger lenders dominate drawn values

Funding Circle leads the market with £456.8 million drawn in Q2 2025, followed by HSBC UK with £354.9 million - the only major high street bank to sit within the top five. Close Brothers follows with £340.0 million, ahead of Allica Bank on £165.2 million and Simply Asset Finance on £154.4 million. 

But again, the other big banks fail to break into the top five. Barclays is the strongest performer at £87.8 million, followed by NatWest with £76.2 million and Lloyds with £69.1 million, all clustered at the back end of the top ten and far behind the levels being delivered by the leading challengers.

Fastest growth in drawn values highlights new players

Some of the most dramatic percentage increases in drawn lending came from smaller or less familiar names. Big Issue Invest expanded its drawn value by more than 700%, Newable Business Loans by over 540%, and Paragon Bank by more than 500% year-on-year. 

The big banks again fail to make it into the top five growth performers, with Barclays growing its drawn value by just over 200%, NatWest by 130%, and Lloyds by 117% - notable increases, but still overshadowed by the surge achieved by specialist challengers.

Challenger lenders also dominate facilities

Funding Circle is also the clear leader in facilities, with 5,771 recorded in Q2 2025. Close Brothers sits second with 1,570, while Simply Asset Finance ranks third with 1,184. HSBC is the only major bank to break into the top five, placing fourth with 1,156 facilities. 

Shire Leasing and Allica Bank follow closely, while NatWest is pushed down to eighth with just 354 facilities. No other big high street banks make the top ten, underlining once again the dominance of specialist challengers when it comes to market delivery.

Fastest growth in facilities highlights specialists

The strongest year-on-year percentage increases in facilities again came from specialist lenders. Newable Business Loans expanded its facilities by 1,000%, Paragon Bank by more than 740%, and Big Issue Invest by 580%. 

Among the better-known names, Barclays achieved a 240% increase, while Bank of Scotland grew by 140% - the only two major banks to feature in the top 10, but still well behind the explosive growth rates delivered by smaller competitors.

Expert commentary

Alasdair McPherson, Commercial Property Expert at Rangewell, commented:

“The latest Growth Guarantee Scheme data shows two things very clearly. First, the scheme itself is working, with lending up nearly 80% in a year and SMEs are demonstrating a real appetite to invest and grow. Second, the market is changing fast, with challenger lenders taking share from the household banking brands.

“This is not about criticising the big banks, they have all grown their lending significantly, but the fact remains that when it comes to delivery, responsiveness and growth, it is the smaller lenders and specialists who are leading the charge. Many SMEs may not even be aware that some of these lenders exist, yet they are the ones driving the expansion of the scheme.

“That is precisely why the role of an intermediary like Rangewell is so important. With so many new and specialist lenders now accredited, it can be difficult for a business owner to know where to start. Our job is to help SMEs navigate this complex market, identify the lenders best suited to their needs, and secure the right funding solution quickly. The GGS has created opportunities across the lending spectrum, but to access them, businesses need guidance as well as appetite."

Finance solutions and opportunity

Rangewell believes that the rapid expansion of the Growth Guarantee Scheme highlights both the strength of SME demand and the growing importance of challenger lenders. For SMEs, the message is clear: relying only on a main bank risks missing opportunities. By working with a specialist intermediary, businesses can access the full breadth of accredited lenders and ensure they find the best terms for their growth plans.

For more information on SME finance and current Growth Guarantee Scheme options, visit www.rangewell.com/sme.

Data Tables and Sources: -

• Data sourced from the British Business Bank (Q2 2024 to Q2 2025 - latest available).
• View the full data tables and sources online here.