Government guarantee still available

SMALL businesses should take advantage of the Government's enterprise finance guarantee scheme, an accountancy firm has said.

Watson Buckle, based in Bradford, is reminding companies that the scheme is still available to help them secure funding from banks.

Under the scheme, the Government guarantees up to 75 per cent of loans up to 1m to companies with an annual turnover of up to 25m.

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It is intended to provide funds for otherwise viable businesses which have been unable to access the funds they need due to banks tightening their lending criteria.

Susan Sedgwick, managing partner at Watson Buckle, said: "This scheme was introduced at the height of the downturn, but it is due

to continue until at least March 2011, making it a viable option for firms which were forced to batten down the hatches during the recession but now need to invest in order to re-stock and take advantage of future opportunities.

"Most UK lenders have signed up to the scheme, although there is no obligation to lend in every case, and we have heard mixed reports on how responsive some banks are, so it is always worth trying more than one lender.

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"The forthcoming General Election could potentially have an impact on the scheme's future, but it is unlikely any party will remove support for business that is already in place, and it may even be that it is ultimately extended for a second time, beyond next March."

Research by Durham University found that 94 per cent of respondents said the EFG loan had improved their business prospects, while 84 per cent said it had improved their prospects of survival.

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