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The Small Firms Loan Guarantee Scheme (SFLGS)
The SFLGS is a joint venture between the Department of Trade & Industry (DTI) and a panel of approved lenders. The DTI do not lend the money but leave the commercial decision to the bankers.
Borrowers are not asked to provide personal guarantees although any personal security will be requested by the lender prior to an SFLGS application being considered. The DTI will provide a guarantee to the lender equivalent to 75% of the amount lent and the borrower pays a modest premium on the amount outstanding to help meet the costs of this.
The scheme is designed to help small and growing businesses who have a viable business plan but lack security. The business plan is a key component of any SFLGS application and this must convince the lender to support the proposal. The importance of a carefully prepared business plan is often under-estimated and we will introduce you to specialists with expertise in this area.
Key Features of the SFLGS scheme
- Available for a large range of business purposes including expansion, additional working capital and purchase of assets. Can’t be used to replace existing borrowings or to buy shares in other companies.
- Available to most types of business. Some exclusions e.g. transport & property
- Turnover up to £5.6m and no more than 200 employees
- Loans between £5000 and £250,000 are available on competitive commercial terms
- Two to ten year repayment terms and capital repayment holidays are available.