FINANCIAL SUPPORT FOR SMALL BUSINESSES

It is very easy to get totally lost amidst all the government announcements and spin about business support. Here we highlight one scheme that may be useful to rural shopkeepers needing finance for their business.

Small retail businesses in the UK are eligible for The Enterprise Finance Guarantee scheme.

This is a government-backed scheme to guarantee bank loans of between £1,000 and £1,000,000 to small businesses. It will help provide working capital and support lending for business growth where there is a sound proposition but a lack of security.

The Guarantee covers the following types of lending:

• New term loans for one to ten years
• Existing lending where lenders might not otherwise refinance the debt
• Conversion of part or all of an existing overdraft into a term loan to release capacity in the overdraft to provide more working capital

Delivery of the scheme is through the banks, including the decision as to which businesses can be accepted onto it. There is no automatic entitlement to receive a guaranteed loan. At time of writing, the following banks are part of the scheme, although others may join later: HSBC, Barclays, Clydesdale/Yorkshire Bank, HBOS, Lloyds TSB, RBS/Natwest.

Businesses will need to provide all the normal information needed for a loan application. In addition to all the normal charges made by the bank, a further premium of 2% of the outstanding loan is payable to the government, with a discount of 25 per cent on all premiums collected during 2009.

For More Information

Contact your bank or click here