Chancellor announces SME funding package

By Anna Jordan on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs

Chancellor Rachel Reeves revealed an SME funding package ahead of her Mansion House speech on July 14, 2026. The most notable measures for small businesses are:

• Expansion of the Growth Guarantee Scheme
• Portfolio guarantee scheme for exporters

Here’s what you need to know about each.

Expansion of the Growth Grant Scheme

This announcement is the main event for small businesses. The Growth Guarantee Scheme provides a 70% government guarantee on commercial loans to SMEs of up to £2 million.

The scheme will be scaling up to facilitate an extra £2 billion of SME funding by 2028/29. That means:

• An increase in the maximum loan length from six years to 10 years for loans of up to £1.1 million
• An increase in the maximum size of a loan from £45 million to £54 million

British Business Bank reckons this will help an extra 12,000 SMEs by 2028/29.  Every £1 spent on the scheme is estimated to support £10 of lending by banks.

Portfolio Grant Scheme

Launching in spring 2027, the portfolio grant scheme will help companies access lending to support exporting and expand into international markets. 

Are these measures enough?

While these actions are welcome, industry professionals think that there’s more to do to help struggling SMEs.

Jonathan Andrew, CEO of Bibby Financial Services, said:

“Extending loan terms and eligibility to include more businesses is a welcome step, particularly at a time when small businesses are facing compounding pressures from within the UK and overseas.

“However, while these measures demonstrate the Government’s desire to back small and medium sized businesses, it’s equally important that SMEs can access the right funding for their businesses. This should involve raising awareness of alternative forms of finance that grow in line with a business’ sales.”

Lisa Cleaver, COO at eCapital UK, commented: “The expansion of government-backed funding through the Growth Guarantee Scheme is a positive step towards improving access to finance for UK SMEs. However, increasing the availability of funding will not address the awareness gap alone. Businesses also need a clearer understanding of the different funding options available and how they can be used to support their individual needs and long-term growth plans.

“Without greater visibility of the options available, funding can become a reactive decision made once cashflow is already under pressure. Earlier conversations, supported by specialist, relationship-led advice, can help businesses put the right funding structure in place for long-term growth, moving away from financial firefighting and towards a more proactive approach.”

Read more

A guide to small business funding: Loans, eligibility and applications – Applying for business funding can be a complex task, so we want to help make things as simple as possible with this easy-to-follow guide

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