Here are some additional details about the Enterprise Finance Guarantee (EFG) scheme :
1. Eligibility
The EFG scheme is available to businesses based in the United Kingdom, including startups, SMEs, and certain non-profit organizations. To be eligible, businesses typically need to have a viable business proposition, demonstrate that they are unable to obtain sufficient finance from traditional sources, and meet the specific criteria of the participating lenders.
2. Loan Amounts
The EFG scheme can guarantee loans ranging from £1,000 to a maximum of £10 million. The loan amount is subject to the lender's discretion and the borrower's specific needs and circumstances.
3. Government Guarantee
Under the EFG scheme, the government provides a guarantee to the participating lenders, covering 80% of the outstanding loan balance. This guarantee helps to mitigate the lender's risk and encourages them to provide funding to businesses that might not meet their usual lending requirements.
4. Interest Rates and Repayment Terms
The interest rates, repayment periods, and other loan terms are determined by the participating lenders. These terms may vary depending on factors such as the borrower's creditworthiness, the purpose of the loan, and the lender's assessment of risk.
5. Use of Funds
The funds obtained through the EFG scheme can be used for various purposes, including working capital, investment in equipment or machinery, acquisition of assets, and business expansion. However, there may be restrictions on certain activities or sectors, so it's important to consult with the participating lender for specific guidelines.
6. Application Process
To apply for an EFG loan, businesses need to approach one of the participating lenders, such as banks or other financial institutions. The lender will assess the business's eligibility, creditworthiness, and ability to repay the loan. If approved, the lender will request the government guarantee from the British Business Bank on the business's behalf.
7. Personal Guarantees
In some cases, lenders may require personal guarantees from the business owners or directors, especially if the loan amount is significant. Personal guarantees make the individuals personally liable for loan repayments if the business is unable to meet its obligations.
It's essential to note that the EFG scheme is subject to specific terms and conditions set by the participating lenders and the British Business Bank. It's advisable to consult the official website of the British Business Bank or speak with participating lenders for the most up-to-date and accurate information regarding eligibility criteria, loan terms, and the application process.
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