Enterprise Finance Guarantee (Lloyds TSB)

Enterprise Finance Guarantee supports businesses develop in the current economic climate

Small and Medium Enterprises (SME's) are at the very heart of the UK economy. They employ more than half of the workforce and will have a key role to play in economic recovery.

At Lloyds TSB Commercial, we believe lending to these businesses is crucial and are committed to working closely with small businesses to develop tailored funding solutions to support their requirements.

As part of this approach, we were one of the first banks to sign up to the Enterprise Finance Guarantee (EFG) and have been recognised by the Government as one of the most active banks, providing around a quarter of all loans issued under the initiative so far.

The EFG was launched on 14 January 2009 and is available until 31 March 2010 through 26 lenders including Lloyds TSB. As with any funding, lenders are looking for firms that have a well structured business plan that demonstrates how the loan will help them realise long-term ambitions.

The EFG is designed to help viable businesses where banks want to lend, but conventional security is not sufficient to support the facilities required. The EFG is managed by the Department for Business, Innovation and Skills (DBIS).

It provides the bank with a 75% guarantee from the Government on the agreed borrowing and means that the bank can offer eligible businesses loans of up to £1 million. Repayments can be spread over 10 years and fixed and variable interest terms are available.

As well as interest, businesses pay an arrangement fee, plus a Government premium of 2% a year paid quarterly, in advance on the outstanding balance of the loan. The Government has reduced this premium to 1.5% for the remainder of 2009.

This scheme is available to businesses that trade and are based in the UK and have an annual turnover of up to £25 million. Although most industry sectors are eligible there are some exclusions and to find out more visit the www.berr.gov.uk website.

Speak to the Lloyds TSB Franchise Unit for eligibility guidance and how this scheme could help your business development. Telephone 0800 5872379 or visit www.lloydstsb.com/franchising for further information.

Richard Holden
Lloyds TSB Commercial