Government EFG Scheme under fire
05/09/2009
The government’s Enterprise Finance Guarantee (EFG) Scheme has come under a fresh round of criticism, with the vast majority of small businesses seeing ‘little point’ in applying for it, according to business consultancy Clifton Asset Management (CAM).
Some 93% of businesses are shunning the EFG scheme, which the Government designed to help them through the recession. Of the 1,000 SMEs surveyed, 28 per cent said they had not heard of the scheme.
Anthony Carty, director of CAM, says:
“These figures back up the huge store of anecdotal evidence we constantly receive from business owners who report it is near-impossible for them to access finance from the banks, regardless of the EFG.”
“If this is supposed to be the government’s flagship idea for helping UK SMEs out of recession, then it is a damning statistic that more than one in four don’t even know what the EFG is. This leaves you with the sense that maybe the government isn’t putting as much pressure on the banks to promote the scheme and lend cash as they would like us to believe.”
The Enterprise Finance Guarantee, is suppose to guarantee lending to viable businesses to ensure that they get the working capital and investment that they need.
The £1.3bn scheme is aimed at supporting bank lending, to UK businesses with a turnover of up to £25 million who are currently not easily able to access the finance they need.
Secure loans are between £1,000 and £1 million through the Government guarantee and the scheme is set to run until 31 March 2010.
According to official figures, more than 4,000 businesses have been offered an EFG loan amounting to a total of £400 million.
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