Enterprise Finance Guarantee Scheme
A government-backed scheme lending to smaller but viable businesses.
As any golfer will tell you, all you can do is your best.
Sometimes you could play your best ever round, do everything right but have a couple of unlucky bounces, even shoot your lowest score ever but that day you are playing Tiger Woods and he’s still 20 shots less than you with one working arm.
So it is with business funding. You can have the right product, pricing, promotion, plan and people yet if it’s the wrong time in the financial cycle, the bank’s IT systems are melting down or a hundred other reasons, you can be denied the chance to expand and take your business to the next level of success. None of it is your fault and there’s nothing you can do about it.
Or is there?
The Enterprise Finance Guarantee (EFG) is a second chance model for businesses to try again to get the funding that realistically, they should have secured at the first time of asking.
The Enterprise Finance Guarantee is a scheme backed by the government that oversees and facilitates lending to smaller businesses that are unable to obtain funding from traditional financial providers due to having insufficient security to meet the lender’s normal security requirements.
Under this scenario, the EFG would provide the lender with a government backed 75% guarantee against the outstanding facility balance, potentially being able to turn the negative credit decision into a positive one.
The EFG can be used for a variety of purposes although there are some sector and lending limit restrictions and exclusions. The EFG lending cannot be used for property investment or development for example.
Loan interest margins are usually higher than a standard business loan and the absolute maximum EFG loan term is 10 years.
Learn more about the Enterprise Finance Guarantee at the British Business Bank.