British Business Bank publishes Enterprise Finance Guarantee Strategic and Operational Design Review

The British Business Bank has today published its Enterprise Finance Guarantee (EFG) Scheme Strategic and Operational Design Review 2015/6. The review covers the effectiveness of the programme and its impact on the UK small business landscape.

The review has been undertaken as part of the British Business Bank’s commitment to regular and thorough evaluations of its programmes to ensure their continuing effectiveness.

EFG supports lending to viable smaller businesses that might otherwise be declined for lacking adequate security or track record. The last economic review of Enterprise Finance Guarantee, published in 2013, produced a clear statement of EFG’s positive impact, estimating a net economic benefit of around £1.1bn

Findings and actions

The review finds that EFG continues to meet a need in the market for smaller business finance, and is broadly effective as currently configured. While the programme has worked well, the report identifies a need to evolve some operational and communication aspects of the scheme to deliver greater diversity to UK small business funding. A series of actions, detailed in the report, have been identified that cover the following areas:

• Increase in both the accredited lenders on the scheme and the products offered – including refreshing existing options.
• Early discussions indicate merit in exploring an asset finance variant.
• Refinement of processes including clarification of eligibility criteria and guarantee fee collection.
• Greater focus on raising awareness of EFG.