Geert Struyven, partner at national audit, tax and advisory firm Crowe Clark Whitehill believes extending the Enterprise Finance Guarantee (EFG) scheme would unlock significant and sustainable business growth, after the latest lending figures were released.
Bank lending to small and medium-enterprises (SMEs) through the government’s EFG scheme is at its highest since 2010, with £111 million offered to companies from June to September, according to the government.
EFG, a government-backed scheme established in 2009, permits banks to lend to SMEs that would not otherwise receive credit, but which are viable and profitable.
As well as offering more – and larger – EFG loans to SMEs via the banks, the value of EFG loans drawn by businesses in the three months up until September, was £87 million, the highest since 2011.
The latest figures bring the number of SMEs benefiting from EFG to 13,400, with offered loans totalling almost £1.4 billion.
The team at Crowe Clark Whitehill, which has offices in Maidstone and Tunbridge Wells, has seen a growing interest from companies seeking to secure financial support via EFG as bank lending continues to be tightly controlled.
Geert Struyven, corporate finance partner, said: “It is clear that EFG offers opportunities for growth to those SMEs that don’t have significant assets to fall back on, but which have real and tangible potential for growth, something the country needs.
“Now is the time to extend EFG rather than continue down the Funding for Lending route, which to date has only had limited success in unlocking the availability of finance to SMEs. Funding for Lending is largely a pricing tool allowing banks to entice companies to borrow – and hopefully invest in growth. EFG, on the other hand, provides the banks with a mechanism that allows them to lend to successful and growing businesses they could normally not lend to, as they have insufficient security to pledge.”
Business secretary Vince Cable has also acknowledged the role and value of EFG. He recently said: “Ensuring small businesses have access to the finance they need in order to grow and thrive remains a crucial issue. The scheme is making a vital contribution and businesses needing finance should take heart that the banks seem to have upped their game.”
EFG funding is currently available through 42 lending providers, including five high street banks. Businesses interested in finding out more about EFG, and putting together an application, should contact Geert Struyven at Crowe Clark Whitehill.