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P FINANCE
Page 49
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Enterprise Finance Guarantee extended
THE ENTERPRISE Finance guarantee (EFG) has been extended to cover top-up payments for invoice factoring and overdraft facilities.
The scheme, which had a slow start in its efforts to make finance more readily available for SMEs by issuing government-backed guarantees, previously covered new-term loan, for working capital or investment running between three months and 10 years; refinancing of existing term loans, where the borrowing firm is struggling with cashf low or has too little security to offer its lender; and conversion of existing overdrafts to loans to free up overdraft capacity.
From 1 October 2009, the scheme encompasses an extra Elm or 30% extra on an advance for invoice factoring, allowing firms to free up cash from their sales ledger. it should also guarantee new or extended overdrafts up to Elm.
The EFG is aimed at SMEs with a turnover of up to £250m, although there are some restrictions for transport.
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