September 13 2013.

Recently released figures suggest that SMEs are benefiting from increasing use of a government finance scheme to help banks to improve availability of finance. The figures show lending through the Enterprise Finance Guarantee (EFG) scheme for the second quarter of 2013 reached £84m, the highest since March 2011. Compared to the same quarter last year, EFG lending increased from £72m to £84m, an increase of 17 per cent.

EFG allows banks to lend to SMEs who would otherwise not receive credit, by providing the banks with a government guarantee for 75 per cent of the loan value. Since May 2010, over 12,400 SMEs have been offered EFG loans with a total value in excess of £1.2bn.

The government has made changes to the EFG scheme over the past year including increasing the turnover limit from £25m to £41m; replacing the £1m per business lifetime scheme limit with a rolling £1m outstanding limit; and raising the level from 13 per cent to 20 per cent of the lenders annual lending portfolio to which the government guarantee applies.

A full breakdown of EFG lending can be found HERE