The government has made another call urging businesses to make use of the Enterprise Finance Guarantee scheme despite claims the initiative is failing.
Business minister Shriti Vadera today welcomed a select committee report which stated the EFG had benefited thousands of businesses and over half a billion pounds worth of applications had been granted or were in the process of being assessed.
She said: “I encourage any small and medium business experiencing difficulty in obtaining a loan or overdraft to talk to banks about the possibility of using the EFG.”
However, the government’s hailing of the scheme as a great success comes after several claims the EFG is failing to reach the small businesses that need it most.
Mark Johnson, corporate finance and lending manager at Clifton Asset Management, said the scheme was failing those in dire need because of ‘the banks’ continued contempt for small businesses and reluctance to lend’.
He added that Clifton had received significant anecdotal evidence from small firms who reported it was ‘near-impossible’ to access finance from banks.
According to official figures a total of 4,054 businesses have been offered an EFG loan amounting to a total of £400m. The average loan value under the scheme, which is available from 27 lenders including the major high street banks, is £99,000.
© Crimson Business Ltd. 2009
