Q: I am planning to buy an existing business but have nothing as security. What is the criteria for a Small Firms Loan Guarantee (SFLG)? And can non UK residents apply for business loans?
Feb 01 2009
Answered by: Marc Barber Ask a question
Finance to buy a business should be available under the Enterprise Finance Guarantee (EFG) scheme which has replaced the SFLG for 2009-10. The scheme enables businesses unable to access traditional bank lending to raise finance. Certain business sectors are excluded from the scheme, broadly agriculture, steel and coal. Participating banks can offer loans up to £1 million for businesses with a turnover of up to £25 million. To access this finance, the bank will need to be convinced of the long-term viability of the business. Forecasts must show that the business is capable of repaying any loans, overdrafts, asset or working capital finance. The bank may request personal guarantees to support its granting finance.
For further information on the EFG, go to the Business Link website.
The difficulty in your case is your non-residency status. Most banks require that to be eligible for finance customers are resident in the UK and have maintained a bank account with them for at least a year before the finance application. This enables them to make the necessary credit checks and to assess how the individual has conducted their financial affairs.
You need to talk to a business relationship manager at one of the main banks – all of which are participating in the EFG.
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