There are a number of schemes available to UK businesses during this time of uncertainty.
Archive for the ‘efg funding’ Category
GOVERNMENT SUPPORT FOR BUSINESS
Wednesday, April 1st, 2020Business Finance Alternatives
Thursday, May 19th, 2011
As I am sure most SME owners agree there are still a few difficult years ahead when it comes to arranging business finance via the traditional high street banks.
In our opinion banks are in a very difficult position. They are under pressure to start lending to small businesses however many of these businesses are not strong enough to justify bank support. The banks have been heavily criticised in the past for being too cavalier with their lending policy. Rock and a hard stone comes to mind.
Thankfully there are many alternative business finance solutions including cash flow finance, asset finance and refinance, trade finance and EFG funding. More often than not there is always an independent finance company willing to structure a deal when the banks cannot help.
Invoice Finance and EFG Funding
Wednesday, March 16th, 2011It is now possible to get Enterprise Finance Guarantee Funding ( EFG) on the back of invoice finance facilities. Additional funding over and above the traditional 80/85% prepayment may be available.
This news may be a welcome relief to businesses that have approached their own high street banks for EFG fundin,g but for one reason or another have been refused. It must be remembered that as far as banks are concerned the availability of a government guarantee doesn’t make a bad deal good. For a business to be available for EFG funding via a high street bank, they must meet that banks normal lending criteria and if there is a lack of security in the deal then that is where the EFG funding kicks in.
If you don’t meet the banks’ normal lending criteria then it won’t get past first base. The problem is that it appears that many commercial high street bank managers don’t know what they can and can’t do and rather than saying no, they string the customer along on a merry dance.
There are currently two invoice finance companies offering EFG funding on the back of invoice finance. One provider will provide an overpayment to a maximim of 100% of the outstanding debtor book whilst the other will provide EFG funding equivalent to any director’s loans that there might be in the business.
Obviously these companies use slightly different criteria and it doesn’t take a rocket scientist to work out which invoice finance company might be best for you.
Factoring and EFG Funding
Friday, March 4th, 2011We automatically assume that the high street banks are the best places to obtain funding via the Enterprise Finance Guarantee Scheme. In fact 90% of EFG funding is supplied by two such banks. If for some reason your business doesn’t meet all of the banks criteria than it maybe possible to obtain EFG funding piggy backed on the back of a factoring facility.
EFG isn’t a right. Your business must meet all the banks normal lending criteria. If you tick all the boxes but there is a lack of security in a deal then that is when the EFG funding kicks into place. If you don’t meet the banks lending criteria then you wont get passed first base. Factoring and invoice discounting companies have very different lending criteria and just because you have been knocked back via the banks doesn’t mean you will do so by a factoring or invoice discounting company.
There are two main factoring companies offering EFG funding and they do things slightly different. One funder will use EFG to lend up to 100% of your debtor book. For a business with high levels of turnover this could amount to significant levels of dosh.
Another funder will advance an amount equivalent to any directors loans in the business up to a maximum of no more than 50% of the debtors advance.
Both companies as always have a slightly different perspective on things and so if you have directors loans in the business it may be worth a have discussions with both to see which one will provide the best funding solution.
Who Is doing Enterprise Finance Guarantee Funding ( EFG ) ?
Wednesday, November 17th, 2010The banks are supposed to be helping small businesses obtain difficult funding in these difficult times and one way is via the EFG or Enterprise Finance Guarantee. Whilst the EFG does not guarantee success of funding via the banks there are one or two viable alternatives via the invoice finance companies.
The problem with the bank based scheme is that a proposal for funding should meet all the banks normal lending criteria. If you have a proposition that they want to do but the only thing that is stopping them doing it is a lack of security then this is where the EFG scheme gives them the security to do the deal. If for some reason they don’t want to do the deal because your business hasn’t been trading long enough or the financials are not strong enough then it wont get passed first base. EFG funding does not make a bad deal good.
An alternative to bank based EFG loans could be funding via invoice finance companies. One funder provides EFG funding on the back of a factoring or invoice discounting company match funding any directors loans but up to a maximum of fifty percent of the debtor book. Another invoice finance company provides EFG funding to give a business 100% of its debtor book.
Invoice finance companies tend to be a little more flexible than the banks therefore if you have drawn a few blanks then it is worth giving them a call. We will gladly point you in the right direction.
