The Scheme

The Enterprise Finance Guarantee is a guarantee facility for small businesses intended primarily to improve the availability of working capital through term loans and the consolidation of overdrafts. It will also support lending for business growth and development in cases where a sound proposition may otherwise be declined due to a lack of security.

The guarantee will cover the following types of lending:-

• new term loans (with terms of between one and ten years)
• existing lending where lenders might not otherwise refinance the debt
• conversion of part or all of an existing utilised overdraft into a term loan in order to release capacity in the overdraft to meet working capital requirements (conditional on the lender being prepared to continue to provide an overdraft and the serviceability of both the term loan and the overdraft)

The guarantee will fund:-

• working capital
• investment by businesses seeking to grow or develop

In addition to regular capital and interest payments to your lender, and any arrangement fee which they may charge, a premium is payable to BERR.

The premium is equivalent to 2% per annum on the outstanding balance of the loan, assessed and collected quarterly in advance throughout the life of the loan.

A discount of 25% will be applied to all premiums due and successfully collected during 2009.

• Eligible businesses are able to borrow between £1,000 and £1,000,000.

Although this scheme has only been available for a short period of time our experts have already prepared a number of funding proposals to several of lenders whom are operating this scheme.

For further details and advice on eligibility then please click here to contact a member of our experienced team.