News

British Business Bank opens up Enterprise Finance Guarantee programme to new lenders

  • The British Business Bank aims to increase the number and diversity of lenders offering EFG-supported facilities to smaller businesses by opening up the lender accreditation process
  • Re-opening of EFG lender accreditation process was a key recommendation from the April 2016 EFG Review

Sheffield & London: The British Business Bank today announces that its Enterprise Finance Guarantee (EFG) accreditation process for new lenders is now open. Lenders, including asset finance providers, are invited to apply to the programme, with the aim of increasing the number and diversity of lenders offering EFG-supported borrowing facilities to smaller businesses.

This re-opening of EFG lender accreditation is in response to one of the recommendations from the Enterprise Finance Guarantee Strategic and Operational Design Review 2015/6, published in April this year. The objective of the review was to maximise the support that EFG offers small businesses. The review highlighted the need for an increase in the number and diversity of EFG accredited lenders and a broadening of the range of products EFG could support (page 29, Action 10). This is in line with two of the British Business Bank’s four corporate objectives, to create a more diverse market for smaller businesses’ finance, with greater choice of options and providers, and to increase the supply of finance to smaller businesses.

The review made several other recommendations, including engaging further with the asset finance sector (and asset finance providers) – a sector which could potentially be supported by EFG, to enable smaller businesses to grow (see p29, Action 11). The British Business Bank is working with the Finance & Leasing Association to widen the scope of EFG to include support for asset finance lending.

Overall, the review found that EFG is still highly valued by both customers and partners. It concluded that the programme continues to enable smaller businesses to obtain finance they would not otherwise be able to access.

The Enterprise Finance Guarantee currently supports £200m-£300m of finance per annum, delivered to the market via more than 40 accredited lending partners, including all the main high street banks, smaller specialist lenders, invoice finance and community lenders.

Judith Ozcan, Managing Director, Lending Solutions at British Business Bank, said:  “We look forward to welcoming new lenders onto the already-successful Enterprise Finance Guarantee programme. EFG has, since its launch in 2009, supported the provision of more than £2.7bn of finance to more than 25,000 smaller businesses in the UK.

“The expansion of the programme is in response to a key recommendation from the recent review and will help in delivering BBB’s corporate objectives to increase the supply of finance to smaller businesses and to create a more diverse and vibrant finance market.”

The Enterprise Finance Guarantee is open to qualifying smaller businesses with turnover of up to £41 million. EFG can be used to facilitate new lending or, to a limited extent, to refinance existing debt. It can be used to support term loans (including asset financing), and revolving credit facilities (including overdrafts and invoice financing).

The guarantee is to the lender and not the smaller business borrower. Decision-making on borrower eligibility is fully devolved to the accredited EFG lenders

Lenders interested in being accredited to use EFG can find more details here or email the EFG accreditation team.

 -ENDS-

For more information please contact:

Scott Shearer, Scott.Shearer@british-business-bank.co.uk

Nick Taylor, Nick.Taylor@wearesevenhills.com 0207 199 2200

About Enterprise Finance Guarantee

Launched in 2009, EFG encourages lending to viable UK businesses that have been turned down for a loan or other form of debt finance, due to inadequate security. It does this by providing accredited lenders with a government-backed guarantee for 75% of the loan value (subject to a cap on total guaranteed lending across the lender’s total loan book). EFG is managed on behalf of the Secretary of State for Business, Innovation and Skills by British Business Financial Services, a wholly-owned subsidiary of British Business Bank plc.

The British Business Bank’s guide, Understanding the Enterprise Finance Guarantee, explains the programme in greater detail, including how to apply and which banks and other lenders are partners in the programme.

About the British Business Bank

The British Business Bank makes finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity. Its objectives are to:

  • increase the supply of finance available to smaller businesses where markets don’t work well
  • create a more diverse and vibrant finance market for smaller businesses, with a greater choice of options and providers
  • build confidence in the market by increasing smaller businesses’ understanding of the options available to them
  • achieve this whilst managing taxpayer resources efficiently and within a robust risk management framework.

The new Business Finance Guide, jointly published this month by the British Business Bank and the ICAEW’s Corporate Finance Faculty, is a unique guide that sets out the full range of options available for smaller businesses looking to raise finance. It also offers advice to help businesses plan for growth.

British Business Bank plc is a limited company registered in England and Wales, registration number 08616013, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).

The British Business Bank operates through a number of subsidiaries. Neither British Business Bank plc nor its principal operating subsidiaries are authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such.

British Business Financial Services Ltd is a wholly owned subsidiary of British Business Bank plc, registered in England and Wales registration number 09174621, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. It is not authorised or regulated by the PRA or FCA.

More information, including a legal structure chart for British Business Bank plc and its subsidiaries, can be found on the British Business Bank website.