New loan scheme to provide "real help" for SMEs
By Catherine Woods, published 1 year ago in Finance & Banking.
Business Secretary Peter Mandelson says it’s crucial the government acts now to help small and medium businesses as they're the “lifeblood of the economy”.
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Mandelson has announced a comprehensive package to help SMEs secure finance. He says: We know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to the tougher credit conditions. That is why we have designed a package of measures addressing different forms of credit and providing real help for businesses.”
The package consists of loan guarantees and a new enterprise fund worth £75m that will be used to invest in small businesses that need equity. The banks will contribute £25m to that fund.
The other measures are a £10bn working capital scheme that will secure up to £20bn of short term bank lending to companies with a turnover of up to £500m, and an enterprise finance guarantee scheme that will secure up to £1.3bn of additional bank loans to small firms with a turnover of up to £25m.
Mandelson also confirmed that discussions are underway with trade credit insurance providers about a potential scheme to help companies affected by reductions in their credit insurance.
In addition, the government is launching a new web portal to help businesses identify their financial needs.
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1 comment.
John Courtney, Strategy Corporate Finance 1 year ago.
The Enterprise Finance Guarantee Scheme (EFG) looks to be an excellent turbo version of the Small Firms Loan Guarantee Scheme with larger amounts of money available to more companies with less restrictions. Oh, that they had increased the guarantee to 90% (which is where it used to be) but begger can't be chosers. This can help business and we applaud it. Morfe details on the scheme at http://www.strategycorporatefinance.co.uk/enterprise-finance-guarantee-scheme.html