Finally there comes some good news for business – Enterprise Finance Guarantee scheme.  It has been announced that until March 2010 there is going to be a new initiative, the EFG Scheme, which will assist businesses with a turn over of up to £25 million with a loan of up to £1 million.  75% of the loan will be guaranteed by the Government and 25% will be unsecured and at the banks’ risk.  This will of course be based on the applicants meeting certain criteria and for companies that are creditworthy.

There are some very interesting changes to this scheme compared to the Small Firms Loan Guarantee Scheme as the SFLG could not be used to cover debt. Many of our clients seek a way of consolidating various debt lines and this was impossible to do with the old scheme.  At first sight the sector industries that are ineligible seem to be greatly scaled down, which is good news, we will of course have to wait to get final information.

What is Enterprise Finance Guarantee Scheme?
This is the Government’s new £1bn EFG Scheme will support up to £1.3bn of new lending by banks to eligible SME’s with working capital or investment needs.

Which companies will benefit from the scheme?

The Enterprise Finance Guarantee Scheme is going to be open to businesses with an annual turnover of up to £25m, seeking loans of £1,000 to £1m, which can be repaid over 10 years.

Most businesses in most sectors will be eligible for the scheme. However, state aid rules exclude businesses in the agriculture, coal and steel sectors.

What sorts of lending will this cover?

The guarantee can be used to support refinance existing loans, new loans or to convert part or all of an existing overdraft into a loan to release capacity to meet working capital needs.

How much of the loan is the Government going to guarantee?

The Government will guarantee 75 per cent of the loan.

How long will the scheme run for?

EFG will be available until March 2010.

Who are the participating lenders?

RBS/Natwest
Barclays
Clydesdale / Yorkshire Bank
HBOS
HSBC
Lloyds TSB
Northern Bank

Other lenders will be come eligible as they apply.

Contact Strategy Consulting Limited Today to see how we can help you with your application – call 0845 838 0936 or email info@strategyconsultinglimited.co.uk

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This entry was posted on Friday, January 16th, 2009 at 2:34 pm and is filed under Business Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.