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- Real help for businesses - new schemes guarantee loans to SME’s…apply now…
Tuesday 20 January 2009 -
Last week Business Secretary Lord Mandelson has introduced a new package of financial measures to provide real help to firms through the economic downturn. If you have short-term working capital constraints or are looking to invest to grow your business these schemes could help you.
Enterprise Finance Guarantee Scheme
In the current climate, businesses are finding it increasingly hard to access the finance they need, particularly working capital. This is because the current economic conditions has made a significant impact on the availability of capital as the banks change their approach to risk and tighten lending conditions. The Enterprise Finance Guarantee aims to help smaller(turnover of up to £25million), credit-worthy companies which might otherwise fail to access the finance they need for working capital or investment finance due to the current tight lending conditions.
The guarantee, available through high street banks, will apply to loans of up to £ 1 million and can also be used to convert existing overdrafts into loans to enable businesses to free up their current overdraft facilities to meet working capital demands. Under the scheme the government will guarantee 75% of any loans made, with the bank covering the remaining 25%.
Working Capital Guarantee Scheme
This is a direct response to the constraint on bank credit available for lending to ordinary-risk businesses with a turnover of up to £500m a year. The Government will provide banks with guarantees covering 50% of the risk on existing and new working capital portfolios worth up to £20bn. The guarantee will secure up to £20bn of working capital credit lines for companies – ensuring they are safe from reduction or withdrawal. In addition, the guarantee will free up capital which the banks must use for new lending as a condition of this scheme. This is lending that would otherwise not have been provided.
Funds for both these initiatives are limited and prompt action is advisable. After canvassing the opinion of several bankers, it is apparent that the quality of any submission will need to be of the highest standard to ensure a successful application.
Dains are able to assist in providing unbiased guidance on funding options and support throughout the scheme application process. We will assist in providing a tailored business plan accompanied with a robust set of financial projections. In addition, we are also able to provide support in obtaining grant funding (where applicable) to contribute towards the cost of any professional fees.
If you would like an informal discussion – please contact Richard McNeilly on 0845 555 8844 or email at rmcneilly@dains.com
Primary offices at… Birmingham ● Burton ● Coleshill ● Lichfield ● Rugeley ● Swadlincote
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