Enterprise Finance Guarantee (EFG) Loans, Are They a Joke?

Is the Enterprise Finance Guarantee (EFG) a sick practical Joke? I am looking for your views and comments.

According to new research Lending to SMEs under the government-backed Enterprise Finance Guarantee (EFG) loan scheme has continued to plummet, with a further fall of 20% in the last quarter and 59% in the last year. The scheme lent a measly £149 million the second quarter of 2010.

No wonder the Bank of England is downgrading its forecast of GDP growth from 3.5% to 3% for the second half of 2011, if the banks don’t start lending again recovery will be fragile.

It’s clear that the EFG is political spin, on the one hand the banks are told to lend money to small and medium sized businesses, however, they are also told by another government body the Financial Services Authority they need to rebuild their balance sheets and be more prudent.

So is the EFG loan a big practical joke that only the chosen few will ever get accepted for?

If you have applied for an Enterprise Finance Guarantee (EFG) Loan and either been successful or not I’d love to hear your story please feel to post your comments below.