Apply to the Small Firms Loan Guarantee scheme
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All too often small businesses with viable business proposals are unable to obtain a conventional loan because of a lack of security. The Small Firms Loan Guarantee scheme helps these businesses by guaranteeing loans from banks and other financial institutions. What are the terms?Loans are available for periods between two and ten years on sums from £5,000 to £100,000 (£250,000 in the case of businesses which have been trading for more than two years). The Small Business Service (SBS) guarantees 70% of the loan (85% in the case of businesses trading for more than 2 years). In return for the guarantee, the borrower pays the SBS a premium of 1.5% per year on the outstanding amount of the loan. The premium is reduced to 0.5% if the loan is taken at a fixed rate of interest. The commercial aspects of the loan (such as the interest rate) are matters between the borrower and the lender. A capital repayment 'holiday' of up to two years is available. Eligibility criteriaNew and existing UK companies with an annual turnover no greater than £1.5m (£5m in the case of manufacturers) can apply for the loans. Many business activities are eligible but there are a number of exclusions. Loans are available for most business purposes although there are a number of restrictions. Applications should be made direct to one of the lenders who are involved with the scheme. They are: Bank of Ireland, Bank of Scotland, Barclays Bank, Clydesdale Bank, Co-operative Bank, Doncaster Business Advice Centre, First Trust Bank/Allied Irish Banks, Lloyds TSB Group, London Enterprise Agency (LEntA), HSBC Bank, Northern Bank, National Westminster Bank, Northern Venture Managers Ltd, Royal Bank of Scotland, State Securities plc, Triodos Bank nv, UK Steel Enterprise, Ulster Bank, Venture Finance plc, Yorkshire Bank, Yorkshire Enterprise Ltd.
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