Enterprise Finance Guarantee Scheme of limited benefit to SMEs
Funding for SMEs under the Government’s Enterprise Finance Guarantee (EFG) Scheme is likely be limited, according to accountancy and financial services group, Smith & Williamson.
Anecdotal evidence suggests a low take-up to date, with much of the problem stemming from a lack of understanding about the type of business the EFG is designed to help. Guy Rigby, Head of Entrepreneurs at Smith & Williamson says: “The EFG is not a panacea for cash strapped SMEs. It is only there for viable businesses that are unable to secure normal bank funding due to a lack of traditional asset-backed security. In my view, only a very small percentage of SMEs will successfully get funding from the scheme.”
Lenders say that the scheme is working and gathering pace, but admit that it is not aimed at the majority of businesses. In addition, in many cases, they are requesting personal guarantees, a further disincentive and risk to hard-pressed entrepreneurs in the current environment.
Rigby adds: “Personal guarantees are only part of the problem. If you talk to the banks and the businesses the EFG is supposed to be helping, it’s clear that the whole scheme needs a rethink. What we need is a simple and widely available system that helps viable businesses. This should be a leading form of lending, not an also-ran.”
For more information, contact
Guy Rigby, Head of Entrepreneurs at Smith & Williamson
020 7131 8213
guy.rigby@smith.williamson.co.uk
PR enquiries to
Jess Koslow/ Kate Harrison 020 7131 4264/4228
Disclaimer
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
About Smith & Williamson
Smith & Williamson is a leading firm of accountants and business advisers. The entrepreneurial and growth business sector is one of its key areas of focus and clients include both private and quoted companies, ranging from early stage to mature businesses with values of tens and hundreds of millions.
In addition to accountancy services, the firm offers an unusually broad range of expertise including tax, investment management, private banking and financial advisory services. It operates from offices in London, Belfast, Birmingham, Bristol, Dublin, Glasgow, Guildford, Maidstone, Salisbury, Southampton and Worcester. Nexia Smith & Williamson is the audit practice of Smith & Williamson and is an independent company.
Smith & Williamson Limited Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.
Nexia Smith & Williamson Audit Limited Registered to carry on audit work and regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.
