Small business lending via government loan scheme continues to drop
1,835 UK small firms were granted Enterprise Finance Guarantee loans in 2015, compared to a peak of 2,030 loans in the second quarter of 2009…
The number of small firms being approved loans by the government-backed Enterprise Finance Guarantee (EFG) scheme has dropped to its lowest figure ever, according to research by Boost Capital.
Only 1, 835 small businesses were granted EFG-backed loans during the whole of last year with just 446 small enterprises obtaining a loan in the last quarter.
The scheme has dwindled year-on-year since its peak between April and June 2009 when 2,030 loans worth £201.6m were approved
The EFG scheme sees the government (through the British Business Bank) act as a partial guarantor on up to 75% of bank loans between £1,000 and £1.2m made to small businesses who cannot offer any assets as security.
Following an announcement by the chancellor in the budget 2016, the EFG will be extended until 2018.
Boost Capital, managing director Alex Littner, said:
“The budget was positioned with small businesses at its heart yet the Enterprise Finance Guarantee scheme that was designed to serve capital-starved small businesses cannot be heralded a success when lending continues to fall.
Building a website for your business idea is easier than you might think. Our online tool ranks the top website builders that offer free trials.
“Ironically, there are more sources of financial help for small and medium enterprises now than ever before, but the government needs to push schemes like EFG and bank referral scheme to help small businesses locate this much needed capital.”