Not enough businesses are applying for government backed lending.
A Government guarantee scheme is still a best kept secret according to ATN Partnership - and Gravesend businesses are missing out.
Securing the money you need to do the things that you want has always been part of the reality of running any business but banks often want security before they will consider lending which is a problem for those businesses who can’t offer any.
But a relatively little known government scheme that has been knocking around for years provides the answer and allows smaller businesses to use mainstream ‘high street’ banks when they may have felt they were out of their reach.
The Enterprise Finance Guarantee scheme (EFG) has been around for more than 10 years and allows viable small and medium sized businesses who are on the edge of a banks risk profile still secure funding.
Niyi Idowu, Partner at ATN Partnership said:
“It really is a great scheme but not enough businesses know about it so we’re having a bit of a push to get it on more people’s radar. In really simple terms, if you have a business plan that a high street bank wants to lend against, but can’t because you do not have enough security, then the EFG steps in to guarantee 75% of the money”
Commercial Terms
Loans are made on the commercial terms that the bank would usually apply and all the normal credit checks will still be made in order to ensure that the proposition and the people behind it makes commercial sense.
Niyi continued:
“The scheme is not about funding businesses that a bank would never consider, it’s about funding a business that the bank can't consider because it can’t get the security it needs to be able to lend. In this instance the EFG will provide the guarantee which unlocks the security blockage. It’s a great scheme”.
So what about the fees or interest rates..? Does it cost a small fortune to access
Niyi said:
“Interest rates are comparable with none EFG lending because the risk is comparable. After the initial set up fee which you’ll get with any bank lending you pay a fee quarterly of 2% of the outstanding balance which is more expensive than a secured loan but seems fair to me given that you have no valuation fees, etc.”
Some sectors such as fishing, shipping and performing arts can’t use the scheme so it is best to check with ATN Partnership first as to whether you qualify and they are happy to check any business plan to see if it’s worth proceeding.
For more information or to discuss if your business might be eligible for the EFG then you can contact ATN on 01474 326224. Alternatively, visit the website; tweet @atnpartnership or email info@atnpartnership.co.uk.
