How the Enterprise Finance Guarantee Scheme works
The Enterprise Finance Guarantee Scheme is the British Business Bank’s initiative to help viable businesses obtain finance that they wouldn’t normally be able to access, either because of inadequate security or a proven track record. The Enterprise Finance Guarantee Scheme works by allowing lenders to provide finance with the comfort of a guarantee provided by the Government.
While the government provides a guarantee to the lender, they have no role in the decision-making process and are not party to the facility agreement between the borrowing business and the lender. The delivery of EFG, including all lending decisions, is fully delegated to the lender. The lender decides whether EFG is appropriate and whether a business is eligible.
PMD has access to funding partners that offer the EFG Scheme and we’ve already written a number of deals and have others accepted, awaiting drawdown. Flexible finance facilities have been arranged for various assets and projects including access platforms, a canning line for a brewery, fitness facility, air-conditioning units for a serviced office refit and we have a facility awaiting drawdown for gin distilling equipment. These deals range from £25,000 up to £1.75m.
Eligible clients will normally display a combination of the following characteristics:
- Standard clients needing assets with value which offers insufficient security throughout the whole of the contract;
- Structured deals e.g. personal guarantees required but unavailable (maybe PE backed), or deposit required but insufficient funds available;
- Credit hungry clients where existing credit lines are full e.g. hire companies with high gearing;
- In all cases it’s essential that the client is able to provide evidence that the lend is fundamentally affordable;
Another key advantage to the scheme is that clients not only access funding that wouldn’t normally be available to them but they also get the benefit of more competitive pricing.
To find out how you might take advantage of funding through the EFG scheme, call us on 0161 633 2548.