Government guaranteeing �1m in loans a day
Business Secretary Lord Mandelson today highlighted the success of a Government loan guarantee scheme after more than �1m of loans a day was underwritten to companies during the first few weeks.
Business Secretary Lord Mandelson today highlighted the success of a Government loan guarantee scheme after more than �1m of loans a day was underwritten to companies during the first few weeks. Since the launch of the Enterprise Finance Guarantee five weeks ago, some 400 loans worth more than �40 million have already been offered and are being processed, he announced. Demand and awareness of the scheme continues to grow steadily since the launch in January, with �14 million in loans processed in the past week alone. The scheme is on course to guarantee an additional �1.3bn of lending to smaller firms over the year. Lord Mandelson said: "These figures show the Enterprise Finance Guarantee is already making a difference to businesses. This targeted support is already helping hundreds of firms which would not have been able to secure finance without a government guarantee. "Inevitably it takes time for schemes to take effect but the amount already lent, in only a matter of weeks, is good news for business. We will continue to work with banks to ensure individual branches are offering the guarantee and will continue to promote the scheme to small businesses across the country." However, he warned the scheme was not a government grant or bail-out and was firmly targeted at fundamentally viable businesses which may be struggling in the short term, but which ultimately will be able to repay their loans. The Government also announced it had started a "mystery shopping" exercise to test that frontline bank staff around the UK are receiving the information they need to promote the guarantee to viable customers. New figures also showed the Government's "Real Help for Business" webpage - part of the national campaign to promote government support schemes for businesses received more than 77,000 hits in the first two weeks. In addition, around 30,000 businesses have also benefited from a Business Link "health check" which helps firms identify potential problems and find the best ways to remain resilient through the downturn. Notes to editors: The Enterprise Finance Guarantee is a �1bn loan guarantee scheme delivered through banks and other lenders that will enable an additional �1.3bn of lending to businesses up to end March 2010. EFG provides a 75% government guarantee on individual loans of up to �1m to viable businesses with annual turnover of up to �25m. The guarantee can be used to support new loans, refinance existing loans or to convert part or all of an existing overdraft into a loan to release capacity to meet working capital requirements. There are 23 lenders registered to offer the scheme: Airdrie Savings Bank, Bank of Ireland (NI only), Bank of Scotland, Barclays, Business Enterprise Fund, Business Finance Solutions, Clydesdale Bank, The Co-operative Bank, DSL Business Finance, GLE oneLondon, HSBC, Lloyds TSB, NatWest, NEL Fund Managers, Northern Bank (NI only), The Royal Bank of Scotland, State Securities, South West Investment Group, Triodos Bank, UK Steel Enterprises, Ulster Bank (NI Only), Whiteaway Laidlaw Bank, Yorkshire Bank.