Number of Small Businesses Granted Government Loans at All-Time Low
Only 446 companies had a loan approved for the Enterprise Finance Guarantee Scheme in the last quarter of 2015
The number of small businesses being granted loans via the government’s Enterprise Finance Guarantee (EFG) scheme has fallen to an all-time low, according to a report by Boost Capital.
Figures from the British Business Bank show that just 446 companies were granted a loan to a total value of £55.7m in the last quarter of 2015.
This compares to 2,030 loans drawn between April and June 2009 – at its peak – at a value of £201.6m.
Only 1, 835 small businesses received EFG-backed loans during the whole of 2015.
The scheme, which sees the government act a guarantor to small and medium business loans, will be extended until at least 2018 following last week’s budget announcement.
Alex Littner, managing director at Boost Capital, said:
“The budget was positioned with small businesses at its heart yet the Enterprise Finance Guarantee scheme that was designed to serve capital-starved small businesses cannot be heralded a success when lending continues to fall.
“Ironically, there are more sources of financial help for small businesses now than ever before, but the government needs to push schemes like EFG and bank referral scheme to help small businesses locate this much needed capital.”