Grin and BERR it with the SFLG
The now renamed DTI (thanks for making me change all my links, BERR) seem to be getting their act together when it comes to the Small Firms Loan Guarantee (SFLG). There was a time when the rejection rates from the banks seemed to be on the increase after they’d been stung by a high level of defaults on the loan (in which case the Government 75% guarantee kicks in, but the bank still takes a hit on the 25% remaining).
Bizarrely though, in these current days of credit crunch, reduced lending and bankruptcy the SFLG seems to be gathering steam again. Alistair Darling has pledged more cash to back it and just recently they’ve expanded the rules so that it’s also available to companies with more than 5 years trading history (previously it was only for those with less than 5). And the banks are following up with letting deals go through.
There are still a few hurdles to jump to get the cash, with eligibility criteria and all the forecasting and business plan justification you’d expect a bank to want, to make sure it’s likely to get it’s money back. Also, you can’t stroll into your local bank and walk out with a big bag of notes (unfortunately many of the smaller lending branches still don’t even seem aware of it’s existence) and it’ll take a few months to process. However, if you can get in through the right door, and speak to the right person and give the right answers and the right proposal then the chances are getting quite high that you could be walking away with up to £250k to grow your business.
The downside is you have to pay it back but if you’ve got a good business and the right plan that shouldn’t be too much of an issue.
Tags: budget, Business, darling, growth, lending, loan, sflg
