In order to spur growth among small businesses, the UK government has announced that it will revamp its flagship Small Firms Loan Guarantee (SFLG).
The overhaul will make the said business support package focus more on early-stage businesses and start-up companies.
This decision came after 38 recommendations were received by the Government asking to update the SFLG so that it remains relevant for the British business climate vis a vis the emergence of international loan programmes.
The changes in the SFLG will take effect starting December. Among the changes will be the expansion of the lending limit to less than five-year-old firms to a single lump sum of £250,000.
Based on the current guidelines, only businesses that have been in existence for more than five years are eligible to apply for the loan. But the Government does realize that younger businesses have lesser opportunities to build a financial record and acquire assets that are necessary factors for borrowing loans.
Additionally, one of the changes in the SFLG will allow mid-stage small businesses to apply. The turnover limit for eligibility will be set at £5.6 million.
According to Competitiveness Minister Barry Gardiner the changes planned for SFLG will help improve the chances of small enterprises to overcome obstacles in their quest to seek financing for their businesses.
Company formation and business solutions experts welcome this move by the Government. They have expressed optimism that with a reinvigorated drive by the Government to give assistance to small businesses, more entrepreneurs will be encouraged to form their own companies.