Enterprise Finance Guarantee Scheme

Number of Small Businesses Granted Government Loans at All-Time Low

Number of Small Businesses Granted Government Loans at All-Time Low

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 ... »

Enterprise Finance Guarantee cut won’t Damage Small Business Loans, says FSB

The Government’s decision to reduce its exposure to defaulted bank loans under the Enterprise Finance Guarantee (EFG) scheme, shouldn’t affect small firms’ access to bank finance, the Federation of Small Businesses (FSB) has said. Under the EFG, the Government guarantees the loans that approved lenders make to small businesses. The scheme allows small firms with few assets to access lending. But in a climate with fears of bad debt, the Government is reducing its guarantee to the banks for larger loans from March 2011. The FSB’s comments followed claims by the chairman of small business at the Royal Bank of Scotland (RBS), Peter Ibbetson, in The Telegraph, stating that reducing the Government’s exposure from 9.75% to 9.225% after the first £1 million of lending would affect the ability of s... »

Rates Up on Enterprise Finance Guarantee Loans

Rates Up on Enterprise Finance Guarantee Loans

The Federation of Small Businesses (FSB) has criticised the Government’s decision to increase the rate of interest it charges small firms for loans under the Enterprise Finance Guarantee Scheme. On 1st January, the rate the Government is charging small firms for guaranteed loans under the EFG scheme increased from 1.5% to 2%. According to the Government, last year’s 1.5% rate was only intended to be used for a short period until the end of a temporary exemption from European Commission rules expired on 1 January. “In addition to regular capital and interest payments to their lender and any arrangement fee which they may charge, firms must pay a premium to the Government,” said a Department for Business, Innovation and Skills (BIS) spokesperson. “The premium is... »

More Businesses Encouraged to Consider Enterprise Finance Guarantee

More Businesses Encouraged to Consider EFG

Business Minister Shriti Vadera today welcomed the Business and Enterprise Select Committee report on the Enterprise Finance Guarantee (EFG), which has seen thousands of businesses benefit from the government guaranteed loan. Six months after being introduced, well over half a billion pounds worth of eligible EFG applications have been granted or are in the process of being assessed by banks. Business Minister Shriti Vadera said: “I welcome this report and the recognition that EFG is helping viable small businesses through this difficult economic time. I also welcome the committee’s interest in testing experience of businesses with their banks. We will also continue to monitor uptake and performance of the banks to ensure EFG plays its part in getting access to finance for smal... »

Enterprise Finance Guarantee Scheme: Factsheet

What is Enterprise Finance Guarantee Scheme? Under the Enterprise Finance Guarantee, the Government will guarantee lending to viable businesses to ensure that they can get the working capital and investment that they need. This is not because the business has suddenly transformed from a success to a failure; but because the current economic conditions has made a significant impact on the availability of capital as the banks change their approach to risk and tighten lending conditions. The £1bn Enterprise Finance Guarantee (EFG) Scheme will support up to £1.3bn of new lending by banks to viable SMEs with working capital or investment needs. Who will benefit from the scheme? The EFG Scheme is open to businesses with an annual turnover of up to £25m, seeking loans of £... »

Government Unveils New Finance Schemes

Business Secretary Lord Mandelson today unveiled a package of measures designed to address the cash flow, credit and investment needs of small and medium businesses. The support package, which builds upon the commitments outlined in November’s Pre Budget Report, consists of loan guarantees and a new Enterprise Fund aimed at helping companies struggling to access finance for working capital and investment. The Government measures include: A £10bn Working Capital Scheme, securing up to £20bn of short term bank lending to companies with a turnover of up to £500m An Enterprise Finance Guarantee Scheme, securing up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m A £75m Capital for Enterprise Fund (£50m from Governme... »