How the Government is Providing Financial Support for Small Businesses

The government of the United Kingdom provides several financial programs for small and medium-sized enterprises in the form of grants and loans. The Enterprise Finance Guarantee and Enterprise Capital Funds are the primary sources of funding for SMEs. Both programs place restrictions on the size and type companies that are eligible for these funds.

Enterprise Finance Guarantee

The Labour government established the EFG in 2009 to increase the number of loans to SMEs. The following key facts apply to EFG loans:

  • The lender provides 25 percent of the loan
  • The government guarantees the remaining 75 percent of the loan
  • The amount of the loan ranges from £1,000 to £1m
  • These loans are available to companies with a turnover of £25m or less
  • The loans have a term of 10 years

EFG loans are not available to SMEs in the coal industry. Businesses in the agriculture, education, financial, forestry, insurance and transportation sectors have some restrictions on qualifying for EFG loans.

Enterprise Capital Funds

The government uses ECFs to invest in SMEs that are growing rapidly. ECFs are currently in nine venture capital funds, and may comprise up to 2/3 of that fund. An SME must apply to each fund individually. The names of these funds are as follows:

  • Amadeus Enterprise Fund
  • Catapult Growth Fund
  • Dawn ECF
  • IQ Capital Fund
  • MMC Ventures ECF
  • Oxford Technology ECF
  • Panoramic Growth Equity
  • Seraphim ECF
  • Sustainable Technology Fund

Companies in the following sectors are ineligible for ECFs:

  • Agriculture
  • Coal
  • Fisheries
  • Motor vehicles
  • Shipbuilding
  • Steel
  • Synthetic fibres and yarns
  • Transportation

Jobs Growth Wales

The Jobs Growth Wales scheme provides job opportunities for unemployed workers between the ages of 16 and 24 years. Participants will work at least 25 hours per week and will receive at least the National Minimum Wage. This programme is for workers who are already job ready, and will help them advance to sustained employment. The Jobs Growth Wales scheme will begin in April 2012.

Advice Services

The Welsh Assembly Government also provides business advice services such as the Academic Expertise for Business (A4B) programme. This programme uses business expertise from high education institutions to support local businesses. Convergence funding from the European Union supports the A4B programme. Applicants must apply for A4B services through a specific high education institution.

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