Loan guarantees are popular policy responses during the COVID-19 crisis. Despite their prevalence, evidence of their effectiveness is sparse. We estimate the impacts of UK guarantees implemented during the Great Recession, by exploiting firm-size eligibility restrictions. The guarantees increased eligible firms’ average performance and survival, by enabling a small number of financially constrained firms to retain high-training-costs workers that helped rebuild the businesses post-crisis. The results demonstrate that standard recessionary guarantees can help mitigate the economic impact of the COVID-19 pandemic, but highlight their limits as policies to protect the livelihoods of workers in low-training-costs jobs.