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Government Loan Schemes

Government backed funding options are one way for SMEs to get access to funding – but what are the choices out there? Knowing your options is an essential part of researching funding plans, and this is even more true when it comes to government and European business loan schemes. Many businesses don’t know what they’re eligible for and could therefore be missing out on valuable opportunities.

The National Loan Guarantee Scheme (NLGS) is one of the most recent additions to the available opportuntities. This offers a range of discounts on new term loans, leasing arrangements and hire purchase ranging from £25,000 to £1m. Lenders are able to offer loan agreements at 1% less than average interest rates, boosting demand for loans and helping to cut overheads and help cash flow for small firms.

There are also options for firms who might not meet conventional funding criteria, such as innovative start ups without a proven long term track record. The Enterprise Finance Guarantee scheme can help to give businesses with a viable business plan an option for funding, even if they don’t have the security that bank loans usually require.

There are also European Investment Bank (EIB) loans allowing businesses with fewer than 250 employees the opportunity  to take advantage of lower interest rates and to finance all of an individual company’s investment costs, up to a max of £11m per project. This loan scheme has been particularly successful in the UK, giving low cost loans to over 7,500 small businesses totaling £2.3bn in the last three years.

There are of course many other options that your business could be eligible for. Invoice finance is one such option that’s quite often overlooked – if your business issues invoices to customers, then you could benefit from factoring or invoice discounting, letting you unlock the capital tied up in unpaid debts for a cash injection into your business.



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