Businesses in the dark about loan scheme

Confusion still surrounds the government-backed Enterprise Finance Guarantee (EFG), as a large majority of businesses say they are unaware of the flagship scheme.


Confusion still surrounds the government-backed Enterprise Finance Guarantee (EFG), as a large majority of businesses say they are unaware of the flagship scheme.

Confusion still surrounds the government-backed Enterprise Finance Guarantee (EFG), as a large majority of businesses say they are unaware of the flagship scheme.

In a survey carried out by the British Chambers of Commerce (BCC), 90 per cent of respondents said they did not know if their bank offered the EFG.

Huw Morgan, head of business banking at HSBC, said: ‘First and foremost we are lending on our balance sheet, but we are supportive of the scheme.

‘There is still confusion surrounding the EFG. We are doing a lot to increase awareness internally, but we could all be doing more to promote it externally.’

Jerome Georgias, franchise co-owner of Jaguar Couriers, has so far approached three banks for the loan and is about to approach a fourth.

He says: ‘The main problem is that the banks have been slow to take it up and have done so at different rates. Our bank, Abbey, didn’t offer it, so we approached Natwest who said they couldn’t give it to us because we had only just opened an account. Then we tried Barclays, who refused us after credit checking the directors rather than the business itself.

‘This is the first time we’ve had to borrow money, if we don’t get help soon we’re looking at closing our doors next month.’

David Frost, director general of the BCC, says: ‘A lot more needs to be done to raise awareness of these schemes. It is business that will drive the UK out of recession and it is vital that banks support companies through what is an extraordinarily difficult time.’

Of the 250 respondents surveyed, 61 per cent of businesses added that late payment of invoices are seriously affecting their cash flow positions.

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