Enterprise FinanceGuarantee

EFG was introduced inJanuary 2009 and is managed by British Business Financial Services, awholly-owned subsidiary of British Business Bank, but remains on the balancesheet of the Department for Business, Innovation and Skills. It wasestablished as a response to the economic downturn which led to the decline ofcredit to SMEs and guarantees 75 per cent of the loan. While thegovernment provides a guarantee to the lender, it has no role in the decisionmaking process and is not party to the loan agreement between the borrowingbusiness and the lender.

Eligibility Criteria

Eligibility for EFG-backed lending is devolved to and will be determined by the lender alongside their normal commercial lending appetite and practices. The following is therefore provided for guidance only.  EFG is open to viable businesses that:

  • operate in the UK
  • have a turnover of no more than £41 million
  • are seeking finance of between £1,000 and £1.2 million
  • wish and can afford to repay over a period of between 3 months and 10 years for term lending and between 3 months and 3 years for overdrafts, invoice finance and other revolving facilities
  • require the finance for an eligible purpose (most business purposes are eligible the most significant exclusion is the financing of specific export orders as alternative forms of assistance for that purpose are provided by UK Export Finance)
  • operate in a business sector that is eligible for EFG (almost all sectors are eligible where exclusions apply they arise from EU State Aid rules)

Please note that neither BIS nor the British Business Bank, which oversees the running of EFG on behalf of BIS, can advise on individual eligibility queries. Please contact your lender for further advice.

Enterprise Finance Guarantee

The Enterprise Finance Guarantee (EFG) is a guarantee scheme to facilitate lending to viable businesses that have been turned down for a loan or other form of debt finance due to inadequate security or a proven track record. In instances such as this, EFG may be able to turn that decline into an acceptance, but that is a decision for the lender and will only be considered if the lender is satisfied that your business is viable and can afford the loan repayments. 

The delivery of EFG, including all lending decisions, is fully delegated to the lender. They will decide whether EFG is appropriate and confirm whether your business is eligible, but businesses unsure about whether they meet the lender's criteria for borrowing or have had a borrowing request declined are encouraged to ask their lender about EFG.

While the government provides a guarantee to the lender, they have no role in the decision making process and are not party to the loan agreement between the borrowing business and the lender.

Types of facilities available

Facilities of the following types, repayable over a period of 3 months to 10 years unless otherwise stated, may be facilitated under EFG subject to the participating Lender offering facilities of the types concerned:

New term loans:  For working capital or investment purposes, including R&D, in cases where the proposition would otherwise be declined due to the absence or inadequacy of security.

Revolving facilities:  New or increased overdrafts, or other forms of revolving facility borrowing, where the SME is viable but has inadequate security to meet a lender's normal requirements for the level of overdraft requested (available for terms of up to 3 years at a time).

Invoice finance facilities:  An additional advance on an SME's debtor book, either in terms of the facility limit or advance percentage, to supplement an invoice finance facility on commercial terms already in place (available for terms up to 3 years at a time).

Term loan for debt consolidation or refinancing:  Provision of a new term loan to replace an existing loan, revolving facility or invoice finance facility which is at risk due to deteriorating security values or where for cash flow reasons the borrower is struggling to meet the existing repayment structure.

Revolving facility refinance:  Preservation of part or all of an existing overdraft, or other revolving facility, which would otherwise be withdrawn due to a failure to satisfy the lender's security requirements.

Invoice finance refinance:  Preservation of part or all of an existing invoice finance facility which would otherwise be withdrawn due to a failure to satisfy the lender's security requirements.

Trade credit guarantee:  Providing a guarantee on new or increased monthly trade credit account where the SME is viable but has inadequate security to meet a lender's normal requirements for the level of credit requested (currently being piloted through a number of large businesses supplying to SME trade customers and generally available for terms up to 1 year).

Please note that participating lenders will generally only provide EFG facilities of types which are consistent with their normal commercial lending product offerings and are under no obligation to offer the full range of types or values of EFG-backed facilities.

For more information contact:

Service Provider

British Business Bank






3rd floor, Fleetbank House, 2-6 Salisbury Square, London, EC4 8JX