Small Firms Loan Guarantee Scheme

What is it?

The Small Business Service (SBS) SFLG 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 lack of security.

Loans are available for periods of between two and ten years on sums from £5,000 to £100, 000 (£250,000 if your business has been trading for more than two years). SBS guarantees 75% of the loan. In return for the guarantee, the borrower pays SBS a premium of 2% a year on the outstanding amount of the loan. The commercial aspects of the loan are matters between the borrower and the lender.

Who can apply?

To be eligible, you must be a UK company with an annual turnover of no more than £3m (£5m if you are a manufacturer). Many business activities are eligible but there are a number of exclusions. Loans are available for most business purposes although there are some restrictions.

How much does the company pay?

In return for the guarantee, the borrower pays SBS a premium of 2% a year on the outstanding amount of the loan. The commercial aspects of the loan are matters between the borrower and the lender.

When can you apply?

Applications should be made direct to one of the lenders who are involved with the scheme. For details of these lenders see the website listed below.

Further details

SBS Loan Guarantee Unit
Telephone: 0114 259 7308/9
Fax: 0114 2597316
E mail: sflgs@sbs.gsi.gov.uk

• www.sbs.gov.uk