UK businesses are being encouraged to study the new eligibility criteria being instituted by the Small Firms Loan Guarantee (SFLG) because of radical changes that it will introduce before the end of the year.
The new changes were arrived at after the Government accepted the recommendations given by the SFLG’s Graham Review – a study that sought to benchmark the UK scheme against other international loan guarantee programmes. A total of 38 recommendations were forwarded with the aim to keep SFLG’s relevance in the current business environment in the country.
Some of the changes that will be instituted are:
• A single lending limit of £250,000 that will apply to all eligible Small and Medium Enterprises (SMEs).
• Boosting to £5.6 million the turnover limit for all eligible SMEs
• Giving banks who have are focusing on high-growth SMEs access to more SFLG lending resources.
• The removal of the limit on the level of borrowing that businesses can be associated with.
Aside from the implementation of these radical changes, the scheme’s focus will now also include start-ups and budding businesses. This means businesses that are less than five years old can no avail themselves of SFLG lending. This is an important move because these young businesses had the least opportunities to build financial track records and assets that will allow them to actually procure loans.