The National Loan Guarantee Scheme will help businesses access cheaper finance, by reducing the cost of borrowing under the scheme by 1 percentage point.

Please read below for further information:

What is the National Loan Guarantee Scheme (NLGS)?

The NLGS is a Government scheme that delivers cheaper bank loans to businesses through
participating banks.

Who can benefit from the scheme?

The NLGS is for viable businesses operating in the UK with annual group turnover of no more than £50m.

What benefit will businesses get from the scheme?

Businesses that take out an NLGS loan will receive a discount on their loan of 1 percentage point compared with the interest rate that they would otherwise have received from that bank outside the scheme. Interest rates on NLGS loans may vary between banks as each bank operates its own pricing models.

How can a business benefit from the scheme?

Businesses should contact the relationship managers at participating banks. The application process is similar to that for regular loans. The banks’ usual lending conditions will apply, including any need for security, such as a personal guarantee.

Which banks are participating in the scheme?

A list of participating banks can be found on the HM Treasury website Participating banks may cease to participate depending upon market conditions. Institutions not participating at the outset of the scheme may do so in future.

What products does it cover?

An NLGS discount can be offered on new term loans, hire purchase and leasing arrangements. This will be determined by each bank. Refinancing of existing facilities where the term or amount has changed is also permitted. The minimum term for a loan under the NLGS is 1 year.

NLGS discounts are not being offered on overdrafts, revolving credit, invoice finance or business credit cards.

How does the scheme work?

The NLGS will provide up to £20 billion of guarantees to banks on their unsecured debt. This will enable participating banks to borrow at a cheaper rate. These banks will pass on the entire benefit they receive from the guarantees to smaller businesses through cheaper loans.

Is the Government guaranteeing loans?

The Government is not guaranteeing loans to businesses or underlying collateral. Borrowers remain fully liable for the repayments of their NLGS loans. Typical requirements for security still apply.

How is the Government monitoring the scheme?

The provision of guarantees is being administered by the UK Debt Management Office. As a condition for participating in the scheme, the banks have agreed a monitoring framework with the Government. All banks will have to submit quarterly reports containing data on the loans they have made under the scheme, and demonstrating that they are passing on all the benefit they receive from the guarantees to businesses. They are also required to provide evidence of what the rates offered to business would have been outside the scheme, to ensure that businesses are getting a genuine discount.

How do European State aid rules affect NLGS loans?

Some NLGS loans will include State aid to businesses. The basis for calculating State aid is the European Commission’s reference rate table, which is a benchmark of appropriate interest rates for loans to businesses. If the interest rate offered to a business under the NLGS is at or above the relevant reference rate, then there are no State aid implications for the recipient business. If the offered interest rate is below the relevant reference rate, then some or all of the benefit received under the scheme will qualify as State aid.

Where an NLGS loan results in State aid, the amount of aid will be clearly stated in a letter to the business from their bank.

What if my business is already getting State aid or Government help?

Under the European Commission’s de minimis State aid rules, a business may not receive more than EUR 200,000 worth of State aid over any three year period. Some loans under the NLGS will result in State aid. State aid under the NLGS would count towards this limit, as would any other State aid that a business receives through another de minimis scheme, such as the Enterprise Finance Guarantee. There are a number of other Government schemes operating under the de minimis State aid rules.

If your business is in receipt of de minimis aid under another scheme, you will have received a letter specifying the amount of de minimis aid. This letter should be shared with the bank as part of any application for a loan under the NLGS, as this may affect the level of benefit that you can receive under the scheme.

Where can I go for further information on the NLGS?

The HM Treasury website provides further information on the NLGS and how it interacts with European Commission State aid rules. For information on specific loan products and more information on how to apply for a NLGS loan please contact a participating bank. In addition, banks will be able to advise you on other Government schemes that help small businesses, such as the Enterprise Finance Guarantee (EFG) and UK Export Finance (UKEF).

If I am not eligible for the NLGS, where else can I go for help?

There is a wide range of financial products and support available from a broad spectrum of providers including banks, Business Angels, community development finance institutions, venture capitalists and trade and asset finance specialists. In some cases the products and support offered are backed by the government through initiatives such as the Enterprise Finance Guarantee (EFG) and the Business Angels Co investment Fund (Angel CoFund). More information on finding finance can be found at the following sources:, and