The Enterprise Finance Guarantee (EFG), the government-backed scheme to lend to high-risk small businesses, is now producing positive and noticeable results according to research from the Department for Business, Enterprise and Regulatory Reform (BERR).
BERR say 2,059 small firms have now been offered loans through the EFG, to the total tune of £186m. 3,071 applications have been assessed, are being processed or have been granted.
Let's not forget, though, these figures are coming from the government. And the money and good intentions are also coming from, um, the government. So we can't necessarily expect a scathingly honest self-critique of the EFG, which many business owners have grappled with and been rejected from.
"It is too late for the 120 businesses a day that have had to close and there is still a lot of resentment of the banks," sais Stephen Alambritis, a spokesperson for the Federation of Small Businesses (FSB). "Even from entrepreneurs who have got the money they wanted – because of the high charges attached to the loans."
Despite that, the FSB seems fairly optimistic about the future of the EFG. It thinks the whole £1.3bn promised to small businesses by the government will be lent by March.
The news will be welcomed by small businesses, many of who didn’t know about the scheme or how to get it when it was launched in January, or whose bank managers were confused about how it worked.
The EFG aims to lend £1.3bn to high-risk small firms who don’t meet normal lending criteria for a loan. The government guarantees 75% of the loan on their behalf. The EFG has replaced the Small Firms Loan guarantee.