More SMEs taking advantage of finance guarantee scheme

Data released today shows that banks offered loans worth £111m to SMEs in the third quarter of 2013, the most since 2010. Of this £111m, £84m was taken.

The business secretary, Vince Cable, said: “Ensuring small businesses have access to the finance they need in order to grow and thrive remains a crucial issue. The scheme is making a vital contribution and businesses needing finance should take heart that the banks seem to have upped their game.

“But there are long-standing problems with the finance markets which need addressing, and that is why I have created the British Business Bank. We need a much more competitive and diverse market, which businesses of all sizes can have confidence in and helps build a stronger economy.”

The EFG helps banks lend to small businesses by providing them with a government guarantee worth 75 per cent of the loan value. More than 13,400 firms have taken advantage of the scheme since 2010, to the tune of £1.4bn.

John Allan, National Chairman, Federation of Small Businesses, said: “We’re pleased to see EFG is beginning to help more small firms access finance, and with Funding for Lending also in place, banks should be guiding viable businesses to Government help where possible.

“To maintain the momentum the FSB continues to press the Government to look at how the EFG can spread its scope, such as making the scheme more flexible for alternative financiers and community development finance institutions.”

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