Business Loans

Enterprise Finance Guarantee

"Funding has arrived into my account and I am sure it will be disappearing quite quickly as well. Many thanks."
Roy Dixon, Augusta Dental Centre

Unsecured loans for SME's. From £1,000 to £1m.

The Enterprise Finance Guarantee (EFG) has replaced the Small Firms Loan Guarantee. It is meant to offer help to small businesses that are having problems accessing finance from their banks. It provides banks with a guarantee of up to 75% of the loan in return for a small premium. The minimum amount available under the scheme is Ł1000 and the maximum is £1m

The Enterprise Finance Guarantee will cover the following types of lending:

new term loans (with terms of between one and ten years)
existing lending where lenders might not otherwise refinance the debt
conversion of part or all of an existing utilised overdraft into a term loan in order to release capacity in the overdraft to meet working capital requirements (conditional on the lender being prepared to continue to provide an overdraft and the serviceability of both the term loan and the overdraft)

The Enterprise Finance Guarantee will fund:

working capital
investment by businesses seeking to grow or develop

In addition to regular capital and interest payments to your lender, and any arrangement fee which they may charge, a premium is payable to BERR.

The premium is equivalent to two per cent per annum on the outstanding balance of the loan, assessed and collected quarterly in advance throughout the life of the loan.

Delivery of the Enterprise Finance Guarantee, including the decision on whether or not it is appropriate to use it in connection with any specific lending transaction, is fully delegated to the participating lenders. There is no automatic entitlement to receive a guaranteed loan and nor is there any pre-qualification process for it.

Value

Up to £1.3 billion of new bank lending will be guaranteed by the Government. Eligible businesses are able to borrow between £1,000 and £1,000,000 when this would not otherwise have been possible.

Eligibility

Small businesses in the UK with an annual turnover of up to £25 million are eligible for the Enterprise Finance Guarantee

Loans for most businesses purposes to businesses in most sectors are eligible. The principal exclusions relate to businesses in the agriculture, coal, and steel sectors, and to the financing of individual export orders. Your lender will advise if any of these restrictions affect your business when they consider your loan application.

Evaluation

Businesses will need to provide all the information normally required by a lender in connection with a loan application, which will generally involve competing their application form and providing supporting information, typically including your:

current business plan, including details of the purpose for which the loan is required and details of other investment in and financial commitments of the business
financial projections
historic trading figures
statutory and management accounts
information on any other publicly funded support received by your business within the past three years

Your turnover must be less that £25m, a Limited company, there are no age restrictions on the business. Advantages over the SFLG include:

Consolidation of debt.
Industry sectors now include Finance & Medical

The IBA team have over 18 years experience in the Small Firms Loan and would be very happy to help for help in eligibility and application for the EFG.

Talk to the experts!
Complete the enquiry form below or mail us: support@theiba.co.uk for more information