The government has announced a £6.5 billion increase in capacity for the British Business Bank’s Growth Guarantee Scheme, which is expected to help around 33,000 smaller businesses access finance over the next four years.

The scheme supports lending to small and medium-sized businesses by providing participating finance providers with a 70% government-backed guarantee. The business receiving the finance remains fully responsible for repaying its borrowing, and lenders retain responsibility for credit and affordability decisions.

Under the expansion, some term loans and asset-finance facilities will be available for up to ten years, increased from six years. The maximum annual turnover for eligible businesses will also rise from £45 million to £54 million.

For delis, farm shops, food halls and speciality producers, improved access to finance could potentially support investment in equipment, premises, store improvements, production capacity or other growth projects.

The government has also ringfenced up to £500 million of existing ENABLE Guarantee capacity over an initial 12-month period to support lending to intellectual property-rich smaller businesses.

Independent retailers welcome the announcement

The British Independent Retailers Association has welcomed the expansion, saying it could help address long-standing barriers to finance experienced by independent retailers.

Andrew Goodacre, CEO of Bira, said: “We welcome the extra funding for this scheme and we really hope it will increase the access to funding for independent retailers. I often hear that lenders consider the sector to be ‘high risk’, and this scheme should go some way to mitigating this risk.”

Investment under pressure

The announcement comes as many local retailers are reducing investment in response to rising employment and operating costs.

Research published by the Association of Convenience Stores on 16 July found that half of the convenience retailers surveyed were actively reducing investment.

Two-thirds were reducing paid staff hours, while more than half of store owners were taking on additional hours themselves. ACS highlighted higher employment costs, business-rate increases, energy-price uncertainty and changes to statutory sick pay among the pressures facing the sector.

ACS chief executive Ed Woodall said local shops needed to be able to invest in their offer, services and people to remain relevant and viable, but that this was only possible with “stability and restraint in the cost increases they face”.

Although the research covers convenience stores, the findings provide important context for independent food retail. They show that the new finance capacity is being introduced at a time when many smaller retailers are reconsidering or reducing investment.

Local shops continue to invest

Despite these pressures, ACS research demonstrates the scale of investment being made by local retailers.

The ACS Local Shop Report found that convenience retailers invested £900 million in their businesses during 2025. However, this was £100 million lower than the £1 billion invested during the previous year.

The association’s Rural Shop Report 2026 also found that rural retailers invested more than £280 million over the preceding year, improving their product ranges and services as well as investing in security measures.

The figures underline both the appetite for investment among local retailers and the financial pressures that can restrict it.

The Growth Guarantee Scheme supports several forms of business finance, including term loans, overdrafts, asset finance, invoice finance and asset-based lending.

Facilities of up to £2 million are generally available, although applicable limits and terms depend on the business, finance product and location. Businesses apply through accredited lenders rather than directly to the British Business Bank.

Government backing does not guarantee that an application will be approved. Accredited lenders remain responsible for determining whether a business is eligible and whether additional borrowing is appropriate and affordable.

Full details of the expansion and links to information about accredited lenders are available from the British Business Bank.