In the News
ENTERPRISE FINANCE GUARANTEE SCHEME
The Government announced on Wednesday 14 January a new scheme to help unlock bank finance to smaller businesses. The scheme will be administered through the banks but will be supervised by the Department for Business, Enterprise and Regulatory Reform (BERR).
This scheme will support up to £1.3bn of new lending by banks.
The government guarantees 75% of the loan, with the banks covering the remaining 25%.
The guarantees will be available through Barclays, Clydesdale/Yorkshire Bank HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank. It will be available from other lenders if they apply.
WHO IS IT DESIGNED TO ASSIST?
The scheme is designed to assist businesses that are:
Looking to increase their working capital funding
Looking to start up, expand or diversify their business.
Most businesses in most sectors are eligible for the scheme but those in the agriculture, coal and steel sectors are not eligible.
KEY FEATURES
A government guarantee which secures bank loans to any viable business with a sound borrowing proposal.
It is open to businesses with a turnover of up to £25m.
It is designed to enable businesses to secure loans of between £1,000 and £1m, repayable over 10 years.
The scheme will operate until March 2010 and is an extension of the £1bn Small Business Finance Scheme outlined in the Pre-Budget Report.
ELIGIBILITY
The purpose of the loan needs to meet the BERR’s eligibility criteria which include:
Starting trading
Developing a project
Expanding an existing business
Purchase of equipment
Businesses will not exceed the European Community State Aid maximum as a result of taking out an Enterprise Finance Guarantee loan.
COST OF FINANCE
Individually negotiated interest rates
Choice of fixed and variable interest rates
A quarterly premium is payable to the Department for Business, Enterprise and Regulatory Reform (BERR).
For more details please contact Patrick Lydon by telephone on 01204 534031 or email patrick@warings.co.uk
16th January 2009
Back to Archive
