More than 10,000 small and medium-sized businesses (SMEs) have accessed £1.04 billion worth of loans via the Government's Enterprise Finance Guarantee (EFG) scheme, according to independent research by Durham Business School.
The EFG was set up under the Labour Government in 2009 following the announcement in the 2008 budget that the government were going to establish a small business finance scheme. The plus point of the EFG are that small businesses who do not have any security can access loans of between £1,000 and £1 million, with the Government acting as guarantor on 75 per cent of the amount. The downside is that is that established businesses looking to expand cannot access the loans where they already have securitable assets, something I found to my cost a fortnight ago when enquiring on behalf of a client who was looking to purchase a brownfield site for development.
The Durham Business School study found that, since May 2010, the EFG scheme has created 6,500 new jobs, saved a further 12,375 jobs and provided £1.1 billion net benefit to the economy
Good News indeed, what a shame however that it has taken taxpayers guaranteeing 75% of the loans for banks to get off their arses and do something!
Text in italics is taken directly from the report.