Posted 23/08/07
by Stephen Barron
by Stephen Barron
Business : Finance : Banking
Cash injection 'live' for small firms
As recommended by the Graham Review, almost 40 amendments have now been put into place to ensure the continuing relevance of the SFLG, in light of competitive loan initiatives abroad.
At its core, the scheme gives unprecedented priority to young companies and start-ups by making £250,000 available to small and medium-sized enterprises (SMEs) less than five years old.
The government says it realises these emerging businesses have had the least opportunity to build up a financial track record and asserts against which to secure borrowing.
Another change to the SFLG is the move to base the lending decision on the quality of the business case put forward, rather than the previous borrowing history of individuals involved in the business.
The scrapping of this so-called ‘connected persons rule’ goes hand-in-hand with the introduction of raised turnover limit for all eligible SMEs to £5.6million, in a move designed to include more mature
Competitive minister, Barry Gardiner, welcomed the widening appeal of the SFLG for the UK’s small and ambitious firms, which he said, often struggle to gain access to finance for company growth.
He added:” The Small Firms Loan Guarantee has enabled thousands of businesses to access around £4bn worth of loans that would not otherwise have been possible, and with these new changes we can now provide an even more consistent and strategic approach to help thousands more in the future.”
Under the revamp, borrowers’ are expected to gain more choice from a wider inclusion of high street lenders, on the condition the banks can demonstrate a focus on so-called ‘high growth SMEs.’
Yesterday the government acknowledged the loan’s “far reaching” changes, drafted to make accessing capital for growth less of an entrepreneur’s nightmare, were thanks to input from
