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EFG loans plunge to new low

Mar 07 2011

Funding fell from £144 million in the third quarter of 2010 to just £99 million in the fourth

Lending under the government’s Enterprise Finance Guarantee (EFG) scheme has fallen to the lowest quarterly figure since the initiative was launched.

Funding fell by 31 per cent in the third quarter of 2010 from £144 million to just £99 million in the fourth.

The amount of money lent under the scheme peaked in the second quarter of 2009 and has been on the slide since then, with lending now just 39 per cent of its level for the second quarter of 2009 of £255 million.

Phillip Monks, chief executive of bank Aldermore says, ‘The trend in lending through the EFG scheme is anything but healthy.

‘The government is very interested in helping small businesses and I don’t think they would want to see lending through the EFG shrink any further. If lending through this scheme does not bounce soon then perhaps the government ought to see what it can do to get it back on track. Making the scheme more attractive to either the banks or to businesses would not be too expensive.’

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