UK Small Firms Loan Guarantee Scheme SFLG new rules apply up to 250000 available

Guest post by: John Courtney
Become an Author

Free PDF Download
Pay Per Click Services UK - By John Courtney

The Small Firms Loan Guarantee scheme - SFLG - has been in existence to enable small businesses with a viable business plan, but lacking security, to borrow money from approved lenders. The Small Firms Loan Guarantee scheme (SFLG) is a joint venture between the DTI and the approved lenders.

The scheme will provide loans between £5000 and £250,000. The DTI do not lend the money as they leave the commercial decision to the bankers.

The borrowers are not asked to provide personal guarantees although any personal security will be requested by the bank prior to a SFLGS application being considered. The DTI will provide 75% of the security to the bank on acceptance by them of the application. Certain businesses are not available for the loan and companies with more than 200 employees are not eligible. Turnover in the prior year to the application must be below £5m for manufacturing industries and £3m for all other businesses. In addition a premium on the amount outstanding is charged by the bank.

NOTE: Changes to the Small Firms Loan Guarantee scheme (SFLG) came into effect from 1 April 2003 meaning that more businesses may be eligible. The changes include:
• A single guarantee rate of 75% for all new loans;
• Sector exclusions removed for retailing, catering, coal, hairdressing and beauty parlours,
• The maximum turnover level for non-manufacturing businesses increased from £1.5m to 3m;
• The premium paid by the borrower set at 2% per year on the outstanding balance for all new loans.

Changes may continue to be introduced by Government, and Strategy Consulting Ltd are happy to advise on the current situation.

The importance of a carefully prepared business plan is often under-estimated. The borrower must convince the potential lender that he or she has a viable business proposal. There is a need for a specialist funding plan to be created identifying closely the compliance with the requirements of the scheme and the banks and our consultants have wide experience in meeting these needs. A potential lender would expect to see information on:
• Management: key personnel, their experience, knowledge of the industry, age, education and training;
• Product or service: details of product or service on offer, state of product development, any follow-up products or services;
• Markets: description of the market and its size, customers, competitors, sales estimates and expected market penetration. Sales forecasts should be supported by hard evidence and research wherever possible. Also an explanation of how the business will succeed in the market against competition;
• The business: when started, results to date, borrowing history, existing commitments, current bankers;
• Objectives and Strategy: business objectives, timetable and assumptions, risk factors, longer term plans;
• Financial Projection: projections of at least one year’s future performance together with supporting assumptions and evidence (order books, customer enquiries). Projections should include profit and loss account, monthly cash flow projections, balance sheets and capital expenditure budget;
• Finance Required: total funding required based on projections, application of those funds, repayment assumptions. Purpose of finance, detailing capital expenditure;
• Security Available: what assets are available as security (personal assets as well as business assets). Also what assets have been used as security elsewhere;
• Management Information Systems: accounting systems used by the business, ability to produce regular management accounts;
• Principal Risks: most likely areas of risk and ability to cope with these. What happens in event of sickness or injury to key personnel?

John Courtney, Chairman
Strategy Consulting Limited
www.strategyconsultinglimited.co.uk
john@strategyconsultinglimited.co.uk

Marketing: SEARCH ENGINE OPTIMISATION - MARKETING - NEW PRODUCTS
Funding: BUSINESS ANGELS - SMALL FIRMS LOAN GUARANTEES - GRANTS
Strategy: STRATEGY - BUSINESS PLANNING - WORKSHOPS

small firms loan guarantee scheme, SFLG, small businesses, business plan, borrow money, DTI, approved lenders

Money for starting a business

Small Firms Loan Guarantee its better than selling your kidney

SBA Guarantee Fee Coming Back…

SBA Guarantee Fee Explained

Business funding sources for today's business owner...

Why The Canada Government Small Business loan Is Your Best Bet For Start Up Financing

Are You Eligible? Canadian Government Small Business Loan Qualifications – SBL Financing Is The Funding You’re Looking For !

Sage Wisdom About Borrowing Money For Your Small Business

Raising Finance to buy a Franchise

Is There A Small Business Loan From Government ? Yes, Here’s Why Canadian SBL Loans Work !

Heard About Canadian Government Business Loans? Why Lending Under The SBL Loan Is Right For Your New Or Existing Business.

SBA\'s Role

GETTING AN SBA GUARANTEE FOR YOUR BUSINESS LOAN

Chimp Simple! Explored The Canadian Government Loan? Get The SBL Guarantee Difference!

Your Futile Search For Government Business Loans Ends Here. The Canadian Govt SBL Loan Navigated ….Perfectly!

Before Applying For A Car loan

Small Loans with Bad Credit in Australia

What’s So Little About the Small Business Government Loan In Canada ! SBL Guaranteed Financing

All You Need To Know About Canadian Government Small Business Loans – BIL Business Improvement Financing

How to Buy a Business Using a Home Equity Loan

Home > Business-Coach > John Courtney > UK Small Firms Loan Guarantee Scheme SFLG new rules apply up to 250000 available > Google +

Free PDF Download
Pay Per Click Services UK - By John Courtney

About the Author: John Courtney

RSS for John's articles - Visit John's website
Strategy Consulting Limited is a small, specialist Management Consultancy for SME's in the UK assisting with business strategy, funding, business planning, marketing and internet. Clients range from start-ups, though to small family firms with a turnover in excess of £1 million and up to International companies turning over £100 million plus. The Chairman of Strategy Consulting Limited, John Courtney has been a Company Director for over 20 years, including many years as Chairman or Managing Director in his own businesses which have ranged from sporting goods to agricultural chemicals. He has been a Non Executive Director for several SME's. John has trained at The Academy of Business Strategy, and is an associate of the Institute of Management Consultancy, and a member of the Institute of Directors. He is also a visiting lecturer on the MBA course at Cranfield University School of Management. John has run training seminars at board level on corporate strategy and made presentations to both large and small groups on funding strategies.
Click here to visit John's website.

More from John Courtney
UK Small Firms Loan Guarantee Scheme SFLG new rules apply up to 250000 available
23 FAQS on Search Engine Optimisation SEO
Pay Per Click Services UK
What is Factoring
PPC Or SEO Which Should You Choose

Share this article. Fund someone's dream.

Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

UK Small Firms Loan Guarantee Scheme SFLG new rules apply up to 250000 available

Related Articles

Related Forum Posts

Share this article. Fund someone's dream.


Name:
Email: