The Enterprise Finance Guarantee Loan (EFG) is a loan guarantee scheme to encourage further lending to viable SMEs, whom have been turned down for normal commercial loans due to lack of security or a proven track record. It allows these turned down companies to still borrow money from approved lenders.
The lender must be satisfied with the businesses ability to repay the loan, to engage in such a scheme. It is up to them to confirm eligibility. They must believe that the business proposal and concept is workable, with growth and succeeding potential.
It is up to them to confirm eligibility. Almost all sectors are engaged in, as are most business purposes acceptable.
Other eligibility factors are:
- Must be UK operating
- Turnover of no more than £41m
- Looking for finance between £25k and £1,200,000
The government back the lender with a 75% guarantee against the outstanding facility balance – enabling a credit decision against a lender to be approved.
Since 2009, when it launched, over 30,000 business loans have been provided.
Look out for companies who are EFG accredited lenders. Some are:
- Aldermore Finance
- Compass Finance Group
- Hitachi Capital (UK)
- NEL fund Managers
- Lloyds Bank
- Metro Bank
- DSL Business Finance
For more information on the EFG, see the gov.uk website here