Welcome for EFG extension
THE GOVERNMENT’S announcement that the Enterprise Finance Guarantee would be extended as part of a raft of measures to help small businesses has been welcomed by the CBI.
Small business Minister Mark Prisk made the announcement at a ‘Summit for Small Business’ yesterday, claiming a cross-government package of measures would help five million small and medium companies grow.
As well as extending the EFG, Mr Prisk said the measures would make it easier for SMEs to work with public bodies, and would allow social tenants to run businesses from their homes. Lord Young of Graffham, a former trade minister in the Thatcher administration, was appointed to replace Lord Sugar as the Government’s ‘enterprise czar’, with a brief to cut red tape and promote small businesses.
Dan Morgan, the CBI’s senior policy adviser for SMEs, said: “The policies announced today are good news for small and medium-sized companies, and are among measures that we have been calling for.
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“We particularly welcome the extension of the Enterprise Finance Guarantee, which will help many smaller firms access the finance they need to grow over the coming years. It will help give SMEs the certainty they need to plan for future investment.”
Mr Prisk said: “We will continue the successful Enterprise Finance Guarantee (EFG) for the next four years, making around £2 billion available to viable small companies without a credit history or collateral. This will provide support to 6,000 SMEs a year. We will also make it easier for small and specialist lenders, such as Community Development Finance Institutions to lend under EFG, supporting companies in disadvantaged communities.
“The Government will commit a further £200m to Enterprise Capital Funds supporting equity investments in the highest growth potential businesses over four years, and it’s anticipated the first of the new funds will be investing early in the new year.
“To encourage ‘business angel’ investments government welcomes the joint bid of business angels and the Government’s SME investment arm, Capital for Enterprise, for a co-investment fund as part of the Regional Growth Fund to support angel investments into high growth potential early stage SMEs, particularly in areas worst affected by public spending cuts.
“The government will also work with banks on several areas launched in their response to the green paper, the Business Finance Taskforce. This includes the £1.5 billion Business Growth Fund, mentoring and a new lending code.”
