Small Firms Loan Guarantee

Last Updated
September 3, 2010

Note: Changes to the Small Firms Loan Guarantee scheme came into effect on 1 April 2003 and cover:

  • A single guarantee rate of 75% for all new loans
  • Sector exclusions removed for retailing, catering, coal, hairdressing & beauty parlours, house & estate agents, libraries, museums & cultural activities, motor vehicle repair & servicing, steel and travel agents
  • Maximum turnover level for non-manufacturing businesses increased from £1.5 million to £3 million
  • Premium paid by the borrower set at 2% per year on the outstanding balance for all new loans

Main Terms & Conditions

The Small Business Service (SBS) Small Firms Loan Guarantee scheme guarantees loans from the banks and other financial institutions for small firms that have viable business proposals but who have tried and failed to get a conventional loan because of a lack of security.

Loans are available for periods between 2 and 10 years on sums from £5,000 to £100,000 (£250,000 if your business has been trading for more than 2 years). SBS guarantees 75% of the loan. In return for the guarantee the borrower pays SBS a premium of 2% per year on the outstanding amount of the loan. The commercial aspects of the loan are matters between the borrower and the lender. To be eligible you must be a UK company with an annual turnover no more than £5.6 million. M any business activities are eligible but there are a number of exclusions. Loans are available for most business purposes although there are some restrictions. If you would like to make an application please do this direct to one of the lenders who are involved with the scheme. They are :

SFLG Approved Lenders Lenders with National Coverage
  • Alliance and Leicester Commercial Bank
  • Bank of Baroda
  • Bank of Scotland
  • Barclays Bank
  • Clydesdale Bank
  • HSBC Bank
  • Lloyds TSB Bank
  • National Westminster Bank
  • The Co-operative Bank
  • The Royal Bank of Scotland
  • Triodos Bank
  • Yorkshire Bank

Scotland

  • Airdrie Savings Bank (North Lanarkshire)
  • DSL Business Finance (West Central Scotland)
  • UK Steel Enterprise
 Geographically Specific Lenders English Regions
  • Doncaster Business Advice Centre (Donbac) (South Yorkshire)
  • The Enterprise Fund (Greater Manchester and Cheshire)
  • NEL Fund Managers (North East)
  • One London (London)
  • UK Steel Enterprise (North of England, Yorkshire, Humberside and the Midlands
  • YFM Group (Yorkshire)

Wales

  • UK Steel Enterprise

Northern Ireland

  • Bank of Ireland
  • First Trust Bank
  • Northern Bank
  • Ulster Bank

The Small Business Service - SBS is looking at adding to the list of approved lenders. You can get further information about the scheme from any of the lenders listed above or else from the SBS Loan Guarantee Unit.
St Mary’s House c/o Moorfoot Sheffield S1 4PQ Tel 0845 001 0032 Fax 0114 279 4374 © Crown copyright

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