British Business Bank’s Flagship Enterprise Finance Guarantee programme passes £3bn lending milestone to smaller businesses

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The British Business Banks’s Enterprise Finance Guarantee (EFG) programme has now supported smaller businesses with loans totalling more than £3 billion.

The provision of over 28,300 business loans, at an average value of around £105,000, has allowed smaller businesses across the UK to grow and further their business ambitions.

EFG enables lenders to make loans of between £1,000 and £1.2 million for smaller businesses who would have been – or already have been – turned down for a loan or other form of debt finance because they are not able to provide sufficient security for the loan. Launched in January 2009, the programme provides its accredited lenders (currently more than forty) with a Government-backed guarantee for 75% of the loan value.

Margot James, the Small Business Minister, said: “Building an economy that works for all is an important part of our Industrial Strategy, which is creating the conditions for businesses to start up and grow right across the country. Today’s £3 billion lending milestone shows just how much Government support is available to help ensure small businesses get the access to finance they need to succeed.”

Reinald de Monchy, British Business Bank, Managing Director, Wholesale said: “In the UK, over 28,000 loans with a total value of over £3 billion have been made to smaller business in sectors as diverse as retail to construction, the arts to support services.

“The Enterprise Finance Guarantee is an important option for smaller businesses who need access to finance to grow, but struggle to meet the lender’s normal security requirements. £3 billion in lending is a major milestone for the programme, making a real difference to the many thousands of businesses it has supported.”

Mike Cherry, Federation of Small Businesses (FSB) National Chairman, said: “This milestone is testament to the fantastic work that the British Business Bank does right across the UK. The Bank facilitates vital access to finance for thousands of small firms, particularly in areas of the country where investment is harder to secure. The £3 billion of lending backed by the enterprise finance guarantee is a critical lifeline for our small business community – we urge lenders to embrace and promote the initiative.”

Amongst the smaller businesses that have used an EFG loan to expand and create new jobs and opportunities are Miss Macaroon, a high-end patisserie based in Birmingham, and Buckinghamshire Mazda Ltd., an Aylesbury-based car dealership trading as Lodge Garage.

  •          Miss Macaroon is run as a social enterprise, with products being hand-made by young people who have experienced long-term unemployment, ex-offenders and care leavers aged between 18 and 35.

Rosie Ginday, Miss Macaroon’s Managing Director, was finding it difficult to secure finance from social and traditional lenders. In March 2016 Rosie successfully approached BCRS Business Loans, an accredited lender for the British Business Bank’s EFG programme. In November 2016, she opened her first store in Birmingham’s Great Western Arcade.

Rosie Ginday said: “Without this loan, I wouldn’t have been able to progress with our plans to open brand new stores and create additional employment opportunities.”

  •       Buckinghamshire Mazda Ltd (Lodge Garage) has a strong new and used car sales business and provides servicing and body shop work. Having undertaken a detailed strategic review of the business model with the help of external consultants, Managing Director Floyd Timms identified a range of opportunities to grow the business, all of which would require further investment. These included new workshops, a new MOT bay, upgrades to signage, staff training and development, and a new reporting system to improve performance management.

In March 2017 Buckinghamshire Mazda secured a £200,000 EFG-backed loan via Lloyds Bank after a full review of its new business plan.

Floyd Timms said: “I could see the growth and opportunity that this suite of reforms offered to our business, but knew that we could not provide the security that the bank would require for the loan. The Enterprise Finance Guarantee programme provided the answer and the business is now investing in changes that will open up all sorts of new opportunities for us.”

CWRT in total has lent £1.35m to individuals and businesses within the West Midlands due to the support of EFG.

Read about our clients and their stories on our Case Studies page.

More information on the EFG can be found in a dedicated section on the British Business Bank website.

Regional breakdown, January 2009 to October 2017:

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Top ten sectors lent to:

1.   Wholesale & retail trade; repair of motor vehicles & motorcycles

2.   Manufacturing

3.   Accommodation & food service activities

4.   Professional, scientific & technical activities

5.   Construction

6.   Human health & social work activities

7.   Information & communication

8.   Administrative & support service activities

9.   Transportation & storage

10.  Arts, entertainment & recreation