Peter Mandelson has declared the Enterprise Finance Guarantee (EFG) scheme a success after it was revealed 1,300 loans worth almost £145 million are currently being processed through it.
The scheme was first announced in January and is designed to stimulate commercial lending. This had been heavily truncated as high-street banks recoiled from heavy declines in profits and stepped back to lick their wounds.
It involves £1bn with which the government is acting as guarantor for 75% of loans of up to £1m. This is available to companies with a turnover of up to £25m.
Almost £30m worth of applications through the scheme are now being processed a week, up from £3m when it first went live.
Mandelson said: “These figures are good news, showing the Enterprise Finance Guarantee is providing real help to businesses. The scheme has taken off since its launch in January with registered lenders now seeing a ten-fold increase in loan demand.
“However, we must continue to work with all 26 lenders signed up to the scheme to ensure frontline staff are offering it where appropriate to small companies across the country.”
The business secretary said in a mystery shopper exercise three quarters of business advisors were up on the EFG and were offering it to clients. The big four banks said they will increase training for their own advisors to up that figure.
Have you sought finance through the EFG? How did you get on? Email [email protected].