Enterprise Finance Guarantee – Facilitating lending to the UK’s smaller businesses
Through the Enterprise Finance Guarantee (EFG), the British Business Bank provides security to lenders by guaranteeing 75% of any losses that the lender may suffer, if the borrower subsequently defaults. This enables lenders to unlock more finance for smaller businesses, creating a more diverse and vibrant finance market with a greater choice of options and providers.
See our new Infographic which outlines how the EFG programme works in practice or download our Enterprise Finance Guarantee guide booklet.
How does a small business apply for an EFG-supported borrowing facility?
It’s simple to apply and should take no longer than a standard loan application. Any small business interested in EFG should, in the first instance, approach one of the 40+ EFG accredited lenders with their borrowing proposal.
If the EFG lender can offer finance on normal commercial terms without the need to make use of EFG, they will do so. Where the small business has a sound borrowing proposal but no, or inadequate security, the lender will consider the small business for support via EFG.
Decision-making on whether a small business is eligible for EFG is fully delegated to the 40+ accredited EFG lenders. These lenders range from high-street banks, to challenger banks, to asset based lenders, through to smaller specialist local lenders.
- As with any other commercial transaction, the borrower is always responsible for repayment of the full value of any facility supported by EFG
- The EFG guarantee is to the lender and not the small business
- All small businesses supported via EFG are required to pay a 2% annual fee to the government, as a contribution towards the cost of the scheme
- This fee is payable on a quarterly basis and is collected by direct debit, directly from the small business’s bank account
Will I be eligible for an EFG-supported borrowing facility?
Please see our ‘Eligibility Criteria’ page for full details on the range of finance products supported by EFG and eligibility criteria.
It is important to remember that decision making is fully delegated to accredited EFG lenders. Small businesses with active or historic EFG loans which have any issues arising from their loans, including premium collection or alterations to their repayment profile should raise them with their lender, and not with the British Business Bank.