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The Enterprise Finance Guarantee Scheme - Can my Business Benefit from the EFG?

Enterprise Finance Guarantee Scheme
Can my business benefit from the EFG scheme?

Increasing cash flow or securing funds to grow your business can seem impossible for many companies today.

Luckily, NatWest and the UK Government could help.
If your company’s turnover was less than £41 million within the last 12 months, the Government could act as a guarantor for your next commercial loan.

How does it work?
The Enterprise Finance Guarantee Scheme is managed by the British Business Bank on the Government’s behalf, and can be used to support term lending.

If you don’t have the necessary security to obtain a conventional commercial facility, you can apply through NatWest to avail of the Enterprise Finance Guarantee Scheme.

Under the EFG scheme, the government will provide a guarantee for 75% of your loan.

However, it’s important to note that you remain liable for 100% of the loan, and that normal recovery and enforcement procedures will be carried out by the bank before calling on the scheme guarantee.

What does the scheme offer?

  • Variable and fixed rates - so you can make the right choice for your business
  • Borrow up to £1.2 million, with a minimum loan of £35,500
  • Three month minimum term and 10 year maximum term
  • Payment holidays - If you need to improve your cash flow, a capital repayment holiday can be taken at the beginning of the process. Should you decide to avail of a payment holiday, you need to be aware that interest will continue to accrue during the holiday period, and that your subsequent payments may increase when you resume payments.

Further Information about the Enterprise Finance Guarantee Scheme
When you take a loan under the scheme, you will need to pay a 2% guarantee fee on the outstanding balance to the Department for Business, Energy, and Industrial Strategy. This fee will be collected in advance; on a quarterly basis by direct debit.

Certain sectors are excluded from this scheme, and restrictions may apply to recipients from other sectors. For full details, speak to your business or relationship manager.

The provision by the Secretary of State for Business, Energy and Industrial Strategy (BEIS) of an EFG scheme guarantee does not imply any endorsement or warranty of the bank from BEIS or the UK Government.

Written by Luke Allen, Business Banking Relationship Manager at NatWest