Between its launch in 2009 and its closure in 2020, the British Business Bank’s Enterprise Finance Guarantee (EFG) supported the provision of over £3.3bn of finance to more than 35,000* smaller businesses in the UK.
EFG facilitated lending to smaller businesses that were viable but unable to obtain finance from their lender due to having insufficient security to meet the lender’s normal security requirements.
In this situation, EFG provided the lender with a government-backed guarantee of up to 75%, against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.
EFG guaranteed loans to fund the future growth or expansion of a business, from £1,000 to £1.2 million. Finance terms were from three months up to 10 years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
Note: A limited number of further eligibility restrictions to apply. Full details can be found here (.pdf, 469kb).
It was simple to apply and took no longer than a standard loan application.
Any small business interested in EFG would have, in the first instance, approached one of the 40+ EFG accredited lenders with their borrowing proposal.
If the EFG lender could offer finance on normal commercial terms without the need to make use of EFG, they would do so. Where the small business had a sound borrowing proposal but no, or inadequate security, the lender would consider the small business for support via EFG.
Decision-making on whether a small business was eligible for EFG was fully delegated to the 40+ accredited EFG lenders. These lenders ranged from high-street banks, to challenger banks, to asset based lenders, through to smaller specialist local lenders.
