Enterprise Finance Guarantee Scheme (EFG)
The Government has launched the Enterprise Finance Guarantee Scheme (EFG) which provides working capital to small businesses through term loans and consolidation of overdrafts. It may also enable lending for business growth and development in cases where a sound proposition may otherwise have been declinded due to a lack of security.
The Government guarantees up to 75% of the value of the business loan and the finance is provided by one of a range of well known providers.
How Much Finance You Can Raise Through the EFG
Through the EFG a business can raise up to £1,000,000 of finance when this would not of otherwise been possible.
The guarantee can cover the following types of lending:
- new term loans (between 1 and 10 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.
Eligibility Criteria for the EFG Scheme
Small businesses in the UK with an annual turnover of up to £25 million are eligible but subject to approval by the individual lender.
Evaluation for the EFG
The business will need to provide the types of information that would normally be required by a lender in respect of a loan application, which may include:
- business plans, including the purpose of the loan
- finacial projections
- historic trading figures
- statutory and management accounts
- information about any other publicly funded support received within the past 3 years
Other Information About the Enterprise Finance Guarantee
The EFG has replaced the Small Firms Loan Guarantee Scheme.
