June 21 2016.

The British Business Bank announced today that its Enterprise Finance Guarantee (EFG) accreditation process for new lenders is now open. Lenders, including asset finance providers, are invited to apply to the programme, with the aim of increasing the number and diversity of lenders offering EFG-supported borrowing facilities to smaller businesses.

This re-opening of EFG lender accreditation is in response to one of the recommendations from the Enterprise Finance Guarantee Strategic and Operational Design Review 2015/6, published in April this year. The objective of the review was to maximise the support that EFG offers small businesses. The review highlighted the need for an increase in the number and diversity of EFG accredited lenders and a broadening of the range of products EFG could support (page 29, Action 10). This is in line with two of the British Business Bank’s four corporate objectives, to create a more diverse market for smaller businesses’ finance, with greater choice of options and providers, and to increase the supply of finance to smaller businesses.

The review made several other recommendations, including engaging further with the asset finance sector (and asset finance providers) – a sector which could potentially be supported by EFG, to enable smaller businesses to grow (see p29, Action 11). The British Business Bank is working with the Finance & Leasing Association to widen the scope of EFG to include support for asset finance lending.

Overall, the review found that EFG is still highly valued by both customers and partners. It concluded that the programme continues to enable smaller businesses to obtain finance they would not otherwise be able to access.

The Enterprise Finance Guarantee currently supports £200m-£300m of finance per annum, delivered to the market via more than 40 accredited lending partners, including all the main high street banks, smaller specialist lenders, invoice finance and community lenders.

Judith Ozcan, Managing Director, Lending Solutions at British Business Bank, said: “We look forward to welcoming new lenders onto the already-successful Enterprise Finance Guarantee programme. EFG has, since its launch in 2009, supported the provision of more than £2.7bn of finance to more than 25,000 smaller businesses in the UK.

“The expansion of the programme is in response to a key recommendation from the recent review and will help in delivering BBB’s corporate objectives to increase the supply of finance to smaller businesses and to create a more diverse and vibrant finance market.”

The Enterprise Finance Guarantee is open to qualifying smaller businesses with turnover of up to £41 million. EFG can be used to facilitate new lending or, to a limited extent, to refinance existing debt. It can be used to support term loans (including asset financing), and revolving credit facilities (including overdrafts and invoice financing).

The guarantee is to the lender and not the smaller business borrower. Decision-making on borrower eligibility is fully devolved to the accredited EFG lenders

Lenders interested in being accredited to use EFG can find more details here or contact the British Business Bank.