The government will today launch a nationwide review into the effectiveness of its small firm loans guarantee scheme following concern that not enough businesses are using the multi-billion pound support service.
Since the SFLG scheme's creation 23 years ago, the Department of Trade and Industry has backed about Ј3bn in bank loans to small and medium-sized businesses, which otherwise would have faced difficulty obtaining credit.
Companies with a turnover of up to Ј3m, or Ј5m if they are a manufacturer, may apply to the scheme. The scheme guarantees 75 per cent of the loan and in return the company pays the DTI a premium of 2 per cent on the debt.
A government official said that the scheme continued to play a valuable role in supporting small businesses.
