WA57

Small Firms Loan Guarantee scheme set to expand

A review of the Government's Small Firms Loan Guarantee (SFLG) scheme has recommended that the scheme should be extended, together with the introduction of measures to reduce the bureaucracy involved.

Teresa Graham, who headed the review, said, 'SFLG is far from perfect. Its objectives are not well understood; its availability is patchy; its administrative structure is showing its age; and costs to the taxpayer are rising fast'.

Under the scheme, the Government underwrites loans for businesses which lack the necessary security.

However, red tape has been seen as a major barrier for many firms, with some firms waiting for up to six months to receive a decision.

The review suggested that lending limits should be raised, to give all SMEs access to the current upper rate of £250,000, and that the £3m turnover limit should be raised to £5.6m.

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