Finance scheme delivers '£1.1bn of benefits'

The government has announced that its Enterprise Finance Guarantee (EFG) scheme is helping small firms gain access to the funding they require while also delivering value for money for taxpayers.

Indeed, the Department for Business Innovation and Skills (BIS) revealed on Tuesday (February 19th) that the programme has helped deliver £1.1 billion of benefits to the economy.

This, ministers believe, works out at £33.50 of gain for every £1 spent by the taxpayers, as some of the smallest businesses in the country benefitted from accessing the resources they needed.

Figures show that more than 10,000 firms have been able to access a total of £1.04 billion in loans since May 2010, with businesses on the margins of traditional bank lending the biggest beneficiaries.

Furthermore, it is believed that an extra 6,500 people are now in work because of EFG, while a further 12,375 jobs have been saved.

And because of its success, the government believes that banks should use the scheme more and show small businesses that they are open to lending ideas.

Business Minister Michael Fallon explained: "Enterprise Finance Guarantee loans are delivered through the banks, and I want to see them making more use of the scheme. This latest research shows that the EFG is helping precisely those businesses who can't get finance elsewhere. It is getting money to where it is needed, saving jobs, and delivering a huge benefit for the wider economy.

"Clearly the demand is there for this type of financial support so we must start to see an increase in take-up."

In a statement, BIS added that "the government now expects the banks to redouble their efforts to provide finance to viable businesses through the EFG scheme".

Only a fortnight ago, Business Secretary Vince Cable wrote to the Bank of England to inquire why small firms were not fully benefitting from the Funding for Lending Scheme.

He said that there had "not been an impact" on small business lending since it was introduced.

Posted by Emily Smith

Date published 21 Feb 2013 | Last updated 21 Feb 2013