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Enterprise Finance Guarantee scheme hits three-year high

Lending under the Enterprise Finance Guarantee scheme have reached its highest level since 2010, according to ministers.
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Newly-released Enterprise Finance Guarantee scheme lending figures show that banks offered loans worth £111m to SMEs in the third quarter of 2013. This is the most since 2010. 

Additionally, the value of Enterprise Finance Guarantee scheme loans drawn upon by businesses this quarter was £87m, the highest level since 2011.

The Enterprise Finance Guarantee scheme is a demand-led programme which allows banks to lend to SMEs who would otherwise not receive credit, through the government providing a guarantee for 75 per cent of the loan value.

Since May 2010, some 13,400 small businesses have taken advantage of the scheme, being offered loans with a total value of £1.4bn.

“Ensuring small businesses have access to the finance they need in order to grow and thrive remains a crucial issue,” says Business Secretary Vince Cable. 

“The EFG scheme is making a vital contribution and businesses needing finance should take heart that the banks seem to have upped their game.”

Cable admits, however, there are still “long-standing problems” with the finance markets which remain to be addressed.

“We need a much more competitive and diverse market, which businesses of all sizes can have confidence in and helps build a stronger economy,” he says.

Enterprise Finance Guarantee lending is available through 42 finance providers, including all of the main high street banks.

The scheme has not always been so successful. In September 2012, Business Minister Michael Fallon wrote to the chief executives of the five main high street banks to challenge them to increase their EFG lending after lending continued to fall significantly from the peak in 2009.

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