The British Business Bank’s Enterprise Finance Guarantee (EFG) scheme facilitates business finance to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lender’s normal requirements. The borrower always remains 100% liable for the debt.
In this situation, EFG provides the lender with a government-backed 75% guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.
Since its launch in 2009, EFG has supported the provision of c.36,000 business facilities to a value of over £3.3bn (as at end of June 2019).
EFG SUPPORTS A WIDE RANGE OF BUSINESS FINANCE PRODUCTS, INCLUDING:
- Term facilities
- Revolving Credit
- Invoice finance facilities
- Asset finance facilities
To be eligible for support via EFG, the small business must:
- Be UK based, with turnover of no more than £41 million per annum
- Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see below)
- Have a sound borrowing proposal, but inadequate security to meet a lender’s normal requirements
- Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
An accredited lender can use EFG to help a borrower access from, from £1,000 to £1.2 million. Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
To apply for an EFG-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.
Please note that a limited number of further eligibility restrictions do apply. Full details can be found here.
Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules. An in-depth list of the main sectoral and purpose restrictions can be found here.
If you are a business interested in EFG please click here.
If you are a current delivery partner or are interested in joining the scheme please click here.