Enterprise Finance Guarantee Scheme?
What was an Enterprise Finance Guarantee Scheme?
The Enterprise Financial Guarantee Scheme was sometimes referred to as the Enterprise Fund Guarantee Scheme. It was introduced in 2009 in the UK.
It then replaced the “Small Firms Loan Guarantee Scheme”.
During the present CORONAVIRUS Covid19 Pandemic, the Government has introduced CBILS-Backed facility for companies?
This scheme temporarily replaces the Enterprise Finance Guarantee Scheme.
The scheme operates in a similar way to EFG though it offers more attractive terms for businesses and lenders during the Covid-19 pandemic.
CBILS promotes lending to viable UK businesses that would be refused a loan due to weak security.
Enterprise Finance Guarantee promoted lending to smaller businesses in the UK. They had to remain viable. However, they were unable to secure finance from their bank or other high street lenders, as they had inadequate security to offer for a loan.
So Enterprise Finance Guarantee presents the lender with a government-backed guarantee of up to 75% of the facility required.
EFG did promote and Backed A Variety of Finance Products For Business.
To be accepted for support from EFG, your small business must then have:
- Be in the UK.
- Annual turnover of less than £41 million.
- Traded within an eligible sector.
- Realistic proposal to borrow when not having enough security to back it.
- Was required to confirm that you have not received other public support of de minimis state aid beyond €200,000.
Enterprise Finance Guarantee loans were for the future growth of your business. Loans guaranteed to range from £1,000 to £1.2 million. Terms were available up to 10 years for term loans, including asset-backed finance. Overdrafts and invoice finance for up to 3 years. Please note: The borrower was therefore responsible for the repayment of the full amount of any facility backed by EFG.
The EFG was to the lender, not the business. Any businesses supported using EFG were obligated to pay a 2% annual fee to the government. Fees payable quarterly and then collected by direct debit from your business account.
For further help, meet the team at HBG Advisory.