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Definition
A government-guaranteed loan is commercial lending where a government scheme guarantees a proportion of the lender’s loss if the borrower defaults — for example the Growth Guarantee Scheme. The guarantee protects the lender, not the borrower.
In plain terms
The guarantee makes lenders more willing to say yes, but it does not reduce what you owe — you are still fully liable for the whole loan.
Why it matters for your company
Such schemes can improve access for businesses that are viable but harder to fund conventionally. Compare the true cost against a standard business loan. See Bounce Back Loan.
Related reading
Bounce Back Loan
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Term loan
A term loan is a fixed lump sum borrowed upfront and repaid over a set period in regular instalments of…
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Personal guarantee
A personal guarantee is a director's legally binding promise to repay a company's debt from their own money…
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Underwriting
Underwriting is the process a lender uses to assess a business's creditworthiness and decide whether to lend,…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.