Government Funds Aim To Improve UK SME Growth
Enterprise Finance Guarantee (EFG) This is a loan scheme designed to enable additional lending to viable SME's which lack security or a proven track record for commercial loans.
The Government provides the lender with a 75% guarantee on each individual loan.
The scheme is delivered by a total of 45 accredited lenders, including all high street banks.
All lending decisions however will remain with the lender.
The EFG scheme is open to SME's with an annual turnover of up to £44million, seeking loans from as little as £1000 up to £1million.
These must be repayable over a period of three months and ten years.
Export Enterprise Guarantee (ExEFG) This scheme provides short term export finance to viable SME's who lack security to obtain the facility commercially.
The Government provides the lender with a 60% guarantee on each individual facility.
The scheme has Barclays, HSBC, Lloyds Banking Group, RBS and Santander as accredited lenders.
ExEFG is accessible to viable SME's with a turnover of up to £25million looking for short term finance for between £25,001 and £1million for terms of up to two years (available in increments of three months.
Enterprise Capital Funds (ECFs) Many young innovative SME's struggle to find equity finance to reach their growth potential and the ECF scheme plans to fill this gap.
Due to the high costs of undertaking due diligence in the start up stages, investors often prefer to invest in companies at a later stage and this scheme aims to address this "equity gap".
ECF uses Government funding alongside private sector investment to bridge this gap.
Business Angel Co-Investment Fund This is a £50million fund to support angel investments into high growth potential, early stage SME's, particularly in areas worst affected by public spending cuts.
This scheme was created from a regional growth fund grant and is able to make investments of between £100,000 and £1 million to SME's alongside syndicates of business angels (subject to geographical restrictions).
Each investment decision is made by an Independent Investment Committee based on detailed proposals from the angel syndicates.
Business Finance Partnership (BFP) This is a scheme that will help SME's access funding through non bank lending channels, helping to diversify the range of funding available to them via alternative lending.
The BFP will invest an initial £1billion in loan funds, alongside private co-investors.
These funds will then be lent to mid sized businesses with a turnover of up to £500million.
The UK Government should be applauded in efforts to help small businesses, and the new plans are more than welcome.
However, these schemes demonstrate that Company Directors can still access funding to help grow their businesses, maintain cash flow and take advantage of new opportunities.
The Government provides the lender with a 75% guarantee on each individual loan.
The scheme is delivered by a total of 45 accredited lenders, including all high street banks.
All lending decisions however will remain with the lender.
The EFG scheme is open to SME's with an annual turnover of up to £44million, seeking loans from as little as £1000 up to £1million.
These must be repayable over a period of three months and ten years.
Export Enterprise Guarantee (ExEFG) This scheme provides short term export finance to viable SME's who lack security to obtain the facility commercially.
The Government provides the lender with a 60% guarantee on each individual facility.
The scheme has Barclays, HSBC, Lloyds Banking Group, RBS and Santander as accredited lenders.
ExEFG is accessible to viable SME's with a turnover of up to £25million looking for short term finance for between £25,001 and £1million for terms of up to two years (available in increments of three months.
Enterprise Capital Funds (ECFs) Many young innovative SME's struggle to find equity finance to reach their growth potential and the ECF scheme plans to fill this gap.
Due to the high costs of undertaking due diligence in the start up stages, investors often prefer to invest in companies at a later stage and this scheme aims to address this "equity gap".
ECF uses Government funding alongside private sector investment to bridge this gap.
Business Angel Co-Investment Fund This is a £50million fund to support angel investments into high growth potential, early stage SME's, particularly in areas worst affected by public spending cuts.
This scheme was created from a regional growth fund grant and is able to make investments of between £100,000 and £1 million to SME's alongside syndicates of business angels (subject to geographical restrictions).
Each investment decision is made by an Independent Investment Committee based on detailed proposals from the angel syndicates.
Business Finance Partnership (BFP) This is a scheme that will help SME's access funding through non bank lending channels, helping to diversify the range of funding available to them via alternative lending.
The BFP will invest an initial £1billion in loan funds, alongside private co-investors.
These funds will then be lent to mid sized businesses with a turnover of up to £500million.
The UK Government should be applauded in efforts to help small businesses, and the new plans are more than welcome.
However, these schemes demonstrate that Company Directors can still access funding to help grow their businesses, maintain cash flow and take advantage of new opportunities.