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Government Support for SMEs
Released on 16/01/2009
Author Martin Rogers

Government Support for SMEs

On Wednesday the 14th January 2009 the Government announced a scheme to help support SMEs who are finding credit difficult to access.

Any viable business made vulnerable by the recent credit ‘crunch’ may be eligible for help. The Federation of Small Businesses and EEF, the manufacturers organisation, have endorsed the move, as does the CSSA.

There are three parts to the scheme: 

  1. Working Capital Scheme
  2. Enterprise Finance Guarantee Scheme
  3. Capital for Enterprise fund

Working Capital Scheme:

The Government will guarantee some bank lending, sharing risk with lenders. This will result in up to £20 billion of short-term bank lending to companies with a turnover of up to £500 million. This fund is targeted at “ordinary-risk businesses” that find that their supply of credit has been drastically reduced recently

Enterprise Finance Guarantee Scheme:

Any company with a turnover of up to £25 million can claim a part of up to £1.3 billion. The EFGS is targeted at “smaller, credit-worthy companies which might otherwise fail to access the finance they need for working capital or investment finance due to the current tight lending conditions”. Companies seeking “loans of up to £1 million for a period of up to ten years” are eligible for this help. Also allows banks to change their overdraft facilities into loans, allowing businesses to “free up their current overdraft facilities to meet working capital demands”.

Capital for Enterprise Fund:Those businesses in need of equity may be entitled to a share of the Capital for Enterprise fund. If successful, this fund will allow businesses to raise “new long-term finance” if said company has a “high level” of existing debt.

The Government has set up a ‘One Stop Shop” easy-to-use web portal. The portal, on the businesslink.gov website, will direct companies to the most appropriate form of support and help them ascertain their eligibility for a range of government support" The online portal can be found at:
http://www.businesslink.gov.uk/realhelp/finance

Contact

Martin Rogers
Email: mrogers@cleaningassoc.org.uk
Telephone: 020 7920 9632

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