British Business Bank’s EFG programme boosts the economy by £415m, according to new review by London Economics

The British Business Bank’s flagship Enterprise Finance Guarantee (EFG) programme, which last month surpassed £3bn of loans supported since its inception, has been found to generate £415m of economic benefits, according to a positive review by London Economics, one of Europe’s leading specialist policy and economics consultancies.

The independent review found that smaller businesses receiving an EFG loan saw higher average growth in turnover (by 7.3% per year) and staff numbers (by 6.6% per year) compared to businesses who didn’t receive an EFG loan. The review examined EFG loans from 2010/11 to 2012/13.

The Enterprise Finance Guarantee, launched in 2009, provides accredited lenders with a Government-backed guarantee for 75% of the loan value, between £1,000 and £1.2 million, for smaller businesses who would have, or already have, been turned down for a loan or other form of debt finance, due to insufficient security.

The programme has supported tens of thousands of smaller businesses who have a sound borrowing proposal and robust business plan to access finance for which they may otherwise have been ineligible.

Other key findings of today’s evaluation include:

  • Over 25 per cent of guaranteed loans under the EFG scheme were issued to start-ups of under 10 employees.
  • The EFG programme’s five-year economic benefit-to-cost ratios – showing the overall benefit to the economy – grew year on year throughout the period examined in the report, with a ratio of 11.3 in the final year (2012/13).
  • Access to finance through the EFG programme was crucial for helping new business survive – start-up EFG recipient’s survival probabilities were 1.2% higher than non-beneficiaries.
  • EFG beneficiary firms were more likely to have introduced new or improved products and services than non-beneficiaries.

This independent evaluation provides the British Business Bank with a further robust evidence base on the EFG programme, particularly in terms of value for money and additionality assessments, upon which to continue to build the programme. The British Business Bank is committed to setting the global standard for independent assessment of national credit guarantee schemes such as the EFG.

The review’s methodological approach and the final report itself have been reviewed by an independent Expert Peer Review Group for Evaluations and received the highest possible score for this type of study.

John Carmody, Director, Guarantee and Wholesale Solutions, said: “We welcome today’s findings, particularly in light of our recent achievement in passing the £3bn EFG funding milestone. We are committed to ensuring that, as the UK’s national economic development bank, we are setting the standard for independent evaluation of our programmes. That’s why we’ve been pleased to work with London Economics to publish today’s findings, which show the real difference our national EFG programme is making to smaller businesses right across the UK, and to the wider economy.

“We look forward to working closely with our expanding network of accredited lenders to build the progamme’s impact, helping smaller businesses get the vital finance they need.”

Download the full report


For more information contact:

Andy Johnson-Creek, MHP Communications, +44 20 3128 8589,

Scott Shearer, British Business Bank,


Notes to editors

About the British Business Bank

The British Business Bank is the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Our remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

British Business Bank programmes support more than £3.4bn of finance to more than 59,000 smaller businesses and participate in a further £5.8bn finance to small mid-cap businesses (as at year-end 2016-17).

As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options, including bank loans and asset finance, available to smaller businesses. It has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). This guide impartially sets out the range finance options available to businesses – from start-ups to SMEs and growing mid-sized companies. Take the interactive journey at or download/print a copy.

British Business Bank plc is a limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ.

As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.

More information, including a legal structure chart for British Business Bank plc and its subsidiaries, can be found on the British Business Bank website.

About the Enterprise Finance Guarantee

The British Business Bank’s Enterprise Finance Guarantee (EFG) facilitates business loans to smaller businesses that have a sound borrowing proposal and robust business plan but are unable to obtain finance from their lender due to having insufficient security to meet the lender’s normal requirements.

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’.

EFG supports a wide range of business finance products, including:

  • Term loans
  • Revolving facilities, such as overdrafts
  • 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)
  • Have a sound borrowing proposal and robust business plan, but inadequate security to meet a lender’s normal requirements
  • Be able to confirm that they have not received other public support of de minimis state aid beyond a particular threshold depending on the sector (usually euro 200,000 equivalent) over the previous three years

The borrower pays a 2% Guarantee Fee as a contribution towards the costs of the scheme.

EFG guarantees loans to fund the future growth or expansion of a business, from £1,000 to £1.2 million. Finance terms are from three months up to 10 years for term loans and asset finance and up to three years for revolving facilities and invoice finance.