What is the Enterprise Finance Guarantee?
Announced in the 2008 Pre-Budget Report, the Enterprise Finance Guarantee is a government-backed loan guarantee scheme that’s aimed at businesses with insufficient security to secure a traditional bank loan.
More commonly referred to as the EFG the government initiative supports up to £1.3bn of new bank lending to viable SMEs in need of a cash injection to boost their cash flow, replacing the Small Firms’ Loan Guarantee (SFLG).
It allows businesses with a turnover of up to £25million to apply for loans between £1,000 and £1million to support new loans, refinance existing loans or to convert all or part of an existing overdraft into a loan that is repayable over a period of up to 10 years to meet the business’ working capital demands.
The Enterprise Finance Guarantee scheme also provides a top-up guarantee on invoice finance facilities to support the advance that was agreed with the funder. You can read more about the benefits of invoice finance here.
What are the benefits of the Enterprise Finance Guarantee?
- Businesses in most sectors are eligible to apply for the EFG.
- Supplied through a funder, the government initiative guarantees 75% of the loan to lower the risk to the funder, increasing the likelihood of lending through the Enterprise Finance Guarantee.
- It allows businesses to apply for a wider loan amount than its predecessor, the Small Firms’ Loan Guarantee.
- The EFG can be provided alongside other funding solutions such as an invoice finance facility.
- Participating lenders must make a decision within 20 days of a business’ application for funding through the Enterprise Finance Guarantee scheme.
Is the Enterprise Finance Guarantee right for my business?
It can be difficult to decide which funder to approach when applying for government initiatives such as the EFG, and it’s important to consider your wider funding requirements in order to maximise your chances of meeting the Enterprise Finance Guarantee scheme criteria such as affordability of repayments.
With more than 13 years’ experience, the UK’s leading independent commercial finance broker, Hilton-Baird, has access to the right lenders on the market that are able to boost your business’ cash flow.
To find out more about the Enterprise Finance Guarantee, please take a look at Hilton-Baird’s EFG FAQs.
Alternatively please call our team on 0800 9774833, email info@hiltonbaird.co.uk or get a commercial finance quote.
Related pages to Enterprise Finance Guarantee: