UK Accredits New Lenders For SME Financing Scheme

by Robert Lee, Tax-News.com, London

22 February 2012

The UK government has approved the participation of four new lenders in its Enterprise Finance Guarantee (EFG), which provides help to small and medium-sized enterprises (SMEs).

The EFG provides funding to those SMEs lacking the collateral or credit history to secure a normal bank loan. The government provides the lender with a guarantee for which the borrower pays a premium. Accredited lenders administer EFG and make all decisions on lending.

The four new lenders accredited to offer loans are Metro Bank, Hull Business Development Fund, Black Country Reinvestment Society, and MSIF (providing finance to SMEs in Merseyside). The government has also announced a new accreditation round which will open on March 1, 2012, and is inviting applications from lenders.

Funding from the Department of Business, Innovation and Skills for the EFG scheme is committed until 2014-15. It will provide up to GBP2bn (USD3.2bn) in additional lending over four years, subject to demand. The EFG is now available to businesses with an annual turnover of up to GBP41m and seeking up to GBP1m worth of loans, subject to eligibility.

Business and Enterprise Minister Mark Prisk said: “If businesses are to start, thrive and grow they must have access to the finance they need, and the Enterprise Finance Guarantee gives more firms the chance to get vital funding. These four new lenders will help widen access to this successful scheme even further."

“The government has committed to guaranteeing GBP2bn of loans over the four years to April, 2015, and we are now opening another accreditation round to encourage even more lenders to offer these loans. The scheme has already supported more than 16,000 businesses and we can support many more,” Prisk concluded.

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