Reeves unveils £500m support for tariff-affected small businesses
Chancellor Rachel Reeves has launched a £500m plan to smaller businesses affected by US president Donald Trump’s tariffs.
Run by the British Business Bank, the Growth Guarantee Scheme will now provide additional lending capacity for firms that will need support with cashflow issues due to changes in tariffs.
Lending up to £2m per business group, the scheme has so far given out £2.1bn across 13,447 firms. 70 per cent of the loan comes with a government-backed guarantee.
At the start of the month, Trump unveiled sweeping tariffs on every country in the world, sending financial markets into a tailspin over fears of a significant slowdown in global economic growth.
The FTSE 100 has plunged 7.5 per cent since they were announced, while the domestically-focused FTSE 250 has dropped 5.8 per cent.
While the president has since put a 90-day pause on the most radical tariffs, the UK still has a 10 per cent tariff on any goods shipped to the US, while his steep 145 per cent tariffs on China may still affect British business sending Chinese-made products to the country.
In the Autumn Budget last year, Reeves pledged more than £1bn in funding for the British Business Bank to continue its programmes throughout the next year.
Other programmes run by the bank include additional support for smaller housebuilders, funding for start-up loans, and programmes supporting innovative, high growth businesses such as companies in life sciences.
“The Growth Guarantee Scheme and its predecessors have proven themselves to be an important means of supporting smaller UK businesses over the last forty years,” said Reinald de Monchy, co-chief banking officer of the British Business Bank.
“The Growth Guarantee Scheme can be used counter-cyclically, enabling smaller businesses to obtain funding during times of uncertainty such as we are experiencing currently. It is therefore important and necessary to see additional capacity made available to support smaller UK businesses at this time.”