Banks improve EFG lending
Small firms that lack the collateral or credit history to secure a normal bank loan should be finding access to the Government’s Enterprise Finance Guarantee (EFG) scheme easier.
The scheme provides vital funding to SMEs by backing bank lending with a 75% government guarantee.
Use of the EFG peaked when it was first launched in 2009 but after disappointing figures in 2012 changes have been made to make it easier to use.
In addition, the Government named and shamed the banks that were failing to make full use of it, since when Bank of Scotland, Lloyds and Santander have all reported significant increases, with Q4 EFG lending for 2012/13 at £91.7 million, the highest level since September 2011.
Business Minister, Michael Fallon, says: “It’s important this isn’t a one-off. Banks must continue to improve their use of EFG. Access to finance is a crucial issue to SMEs and economic growth will depend on businesses having the certainty that banks are lending”