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Enterprise Finance Guarantee Scheme?

Enterprise finance guarantee scheme. Author: John A Waller, Director.

What was an Enterprise Finance Guarantee (EFG) 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 CORONAVIRUS COVID-19 pandemic, the Government introduced CBILS-Backed facility for companies. 

This scheme temporarily replaces the Enterprise Finance Guarantee Scheme.

The scheme operates similarly to EFG, offering 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 could not 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.

Enterprise Finance Guarantee promoted and Backed A Variety of Finance Products For Business.

Invoice finance
Asset finance

So to be accepted for support from EFG, your small business must then have the following:

  • 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 for 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 responsible for repaying 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 the government a 2% annual fee. Fees  payable quarterly and then collected by direct debit from your business account.

For further help, meet the team at HBG Advisory.

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