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Loan Guarantee Scheme

The States of Guernsey has finalised a loan guarantee scheme to enable further financial support for Bailiwick businesses. The scheme is operated by the clearing banks - Barclays, HSBC, Lloyds and RBSI/NatWest, however the Scheme will be open for other banks to join should they wish to. Businesses that wish to utilise the scheme should talk to their banks directly.

The Principles of the Scheme are as follows:

  1. The Scheme only applies to trading businesses. Businesses regulated by the Guernsey Financial Services Commission, property investment and development businesses and construction businesses are excluded. This is subject to a maximum turnover of £10 million.
  2. The Scheme only applies in respect of new lending and not any existing debt issued by the banks, including the cancellation of one form of lending and its replacement with another.
  3. The States Guarantee will apply in respect of 80% of the total amount provided by the banks.
  4. The loans and overdrafts will be for between £5,000 and £500,000.
  5. The Scheme will remain open until the 31st December 2020.
  6. The government guarantee will remain valid for a total of 8 years, this is made up of a term of 6 years, with an additional 18 months to allow the banks to effect recovery and a further 6 months for the bank to effect a claim against the States’ Guarantee if necessary.
  7. An individual’s principle primary residence cannot be provided as security to a bank in respect of the Scheme.
  8. The banks may lend up to £250,000 without seeking any form of security from the borrower.
  9. The banks have a reporting requirement to government in respect of the number of loans issued and the amount and in respect of applications received but declined.


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