GOVERNMENT FUNDING, LOAN GUARANTEE SCHEMES AND
January 2009, the Government introduced measures
to give small and medium-sized businesses
(SME’s) access to up to £20bn in bank loan
finance, aimed at helping companies during the
credit crunch. These measures are the
Enterprise Finance Guarantee Scheme (EFG),
the Working Capital Scheme (WCS) and the Capital
for Enterprise Fund.
The Business Secretary, Lord Mandelson,
announced three measures, saying they are
designed to tackle the cash flow, credit and
investment needs of businesses.
ENTERPRISE FINANCE GUARANTEE SCHEME (EFG)
Enterprise Finance Guarantee Scheme (EFG) is aimed at
businesses with a turnover of up to £25m, securing up to
£1.3bn of additional bank loans. The EFG scheme will
guarantee 75 percent of loans, with banks covering the
remaining 25 percent. According to the statement from
BERR, the scheme is for "smaller, credit-worthy
companies which might otherwise fail to access the
finance they need for working capital or investment
finance due to the current tight lending conditions".
Enterprise Finance Guarantee Scheme appears to be
the replacement for the long established
Small Firms Loan Guarantee Scheme (SFLG).
WORKING CAPITAL SCHEME (WCS)
A £10bn Working Capital Scheme (WCS) that the
government claims will secure up to £20bn of short-term
lending to companies with a turnover of up to £500m. It
expands a scheme announced by the chancellor in November
2008, to support a £1bn bank facility for smaller
exporters. This has now been opened up to more
businesses and lending, and not just exporters.
CAPITAL FOR ENTERPRISE FUND
This is an expansion of a £50m scheme announced by
the chancellor to help small businesses to convert debt
into equity. The Government and banks will invest
through the Capital for Enterprise Fund £75m - £50m from
the Government and £25m from banks - in viable companies
that have high levels of existing debt. In the private
Business Angels are an alternative option.
The banks that are expected to administer the schemes
initially are Lloyds TSB, RBS/Natwest, Barclays,
Clydesdale/Yorkshire Bank, HSBC, HBOS, and Northern
Strategy Corporate Finance has many years experience
of helping clients obtain Government Loan Guarantee
Schemes and Funds, with a success rate of over 90%.
We can only help with funding and advice for sums
over £50,000. For enquiries below £50,000, please
contact your nearest