Enterprise Finance Guarantee scheme is a flop

Of more than 1,000 UK small business owner-managers questioned by Clifton Asset Management (CAM), 68 per cent said they had heard of the Enterprise Finance Guarantee (EFG) scheme but, of those, a full 93 per cent said they saw “little point” in applying for it.

The results are a kick in the teeth for Lord Mandelson and his cronies. Under the terms of the EFG, the government will guarantee bank lending to UK businesses with a turnover of up to £25m who are not easily able to access the finance they need, enabling them to secure loans of up to £1m. The scheme was introduced to support viable companies who find themselves at the margins of commercial lending through things like insufficient security or because their reasons for borrowing contain elements of risk. “We learned recently from the government’s own figures that the amount of money in the form of loan guarantees which got through to businesses over the last financial year had actually fallen on the previous year and was well short of the £1.3bn budget, which had supposedly been set aside,” comments Anthony Carty, director at CAM.

“These figures, and the results of our own survey, back up the huge store of anecdotal evidence we constantly receive from business owners that it is near-impossible for them to access finance from the banks, regardless of the EFG.” Of the small businesses in the survey who had decided to apply for EFG help, just one per cent actually received it.  “This is supposed to be the government’s flagship idea for helping UK SMEs out of recession yet these damning results leave a sense that maybe the government isn’t putting as much pressure on the banks to promote the scheme and lend cash as they would like us to believe,” says Carty.

Related articles:Peter Mandelson: "I’m a kindly pussycat"Young entrepreneurs: fancy winning £10,000 funding?

Share this story

Close
Menu
Send this to a friend