New lenders join SME finance scheme

Four new accredited lenders will join the Government's Enterprise Finance Guarantee (EFG) scheme to offer loans to small and medium sized enterprises (SMEs), the Department for Business, Innovation and Skills has announced.

Metro Bank, Hull Business Development Fund, Black Country Reinvestment Society, and MSIF, who will specifically provide finance to SMEs in Merseyside, will now join the scheme that provides SMEs with capital that may otherwise be declined due to lack of security.

The EFG scheme was originally launched in 2009 to assist SMEs in obtaining capital during difficult credit conditions. Backing 75% of the loan value, the Government will now continue the scheme until 2014/15, aiming to provide £600 million in lending to 6,000 SMEs this year to aid UK economic recovery.

The Government is keen to promote the funding and finance available for SMEs after it was revealed that Project Merlin - a commitment to lend more to SMEs -failed to meet its lending targets.

As of November last year, the Government altered the qualifying criteria for the EFG scheme allowing SMEs with an increased turnover of less than £41 million - previously £25 million - to seek up to £1 million worth of loans.

Mark Prisk, business and enterprise minister, said: "If businesses are to start, thrive and grow they must have access to the finance they need, and the Enterprise Finance Guarantee gives more firms the chance to get vital funding. These four new lenders will help widen access to this successful scheme even further.

"The Government has committed to guaranteeing £2 billion of loans over the four years to April 2015, and we are now opening another accreditation round to encourage even more lenders to offer these loans. The scheme has already supported more than 16,000 businesses and we can support many more."

Lenders who are interested in joining the EFG scheme can apply for the new accreditation round which will open on 1 March 2012.