If you're looking to expand your business, confidence that you'll be able to secure funding to meet your growth needs is extremely important. But it can appear that getting hold of required funds is an ever more challenging pursuit.
But, says Andy Cutbill, head of products and pricing at Lloyds TSB Commercial, with government schemes designed to make access to finance easier for SMEs, businesses can be confident that funding for growth is widely available - and at a discounted cost.
"As part of our commitment to supporting UK businesses, Lloyds TSB is proud to participate in two key government schemes - the Enterprise Finance Guarantee and the Funding for Lending Scheme," he says.
"As a bank, we're supporting an SME-led investment and growth strategy to help the UK economy."
Funding for SMEs without security
The Department of Business, Innovation and Skills (BIS) set up the Enterprise Finance Guarantee (EFG) in 2009. The scheme was established to improve access to funding for eligible SMEs with viable propositions that may lack adequate security, or those that don't have a proven track record to meet the criteria for a typical commercial loan.
"We've been involved in this scheme from the start," says Andy, who went on to explain its merits: "It's a great support mechanism for customers who we would normally lend money to but who do not have security available to support their lending request."
"The scheme is designed to support businesses with working capital, expansion plans, diversification or development of their business. Examples could include developing a new project, expanding their business to improve efficiency or even buying a business, equipment or property," he explains.
One business that has secured loans under the EFG is Lloyds TSB Commercial customer Team Sport Indoor Karting. The business, which operates nine indoor recreational racetracks across the south of the UK, has opened a new go-karting centre in Brighton, after securing financial help from Lloyds TSB.
Paul Wrightman, owner of Team Sport, explained what the EFG loan has meant to the business: "The support from Lloyds TSB Commercial was essential to successfully securing the Brighton site when time was of the essence, and helped us to expand into a new geographic area that we had identified as being a good opportunity for future growth."
Similarly, Lloyds TSB customer Care at Home Services was accepted for an EFG loan to help them acquire another business. Andrew Clark, relationship director with Lloyds TSB Commercial highlighted the scheme's benefits.
"EFG loans are particularly suited to SME businesses like Care at Home Services. Businesses can borrow between £25,000 and £1m and repayments can be spread over one to 10 years," he says.
Lloyds Banking Group are one of the most active EFG lenders, and by the end of September 2012 had offered more than 5,100 EFG loans, worth more than £390m – 27% of all loans granted through the scheme so far.
Reduced borrowing costs for SMEs
The Funding for Lending Scheme (FLS) was launched by the Bank of England and HM Treasury earlier this year and is designed to improve access to funding for businesses and UK households. The scheme will be open for 18 months until January 2014.
As part of Lloyds TSB's participation in the scheme, it has reduced the interest rate by 1% on all approved business loan, commercial mortgage and hire purchase applications received after 10 September 2012 – a rate which will last the whole life of the loan.
"This scheme comes at a time when there are exceptional pressures on the UK economy," says Andy. "It was a logical transition for us to support the FLS, following the £1.4bn we committed to lend as part of the National Loan Guarantee Scheme which FLS replaced.
"By supporting the scheme, we are helping the UK's businesses to grow, while showing that we are very much open for business."
Count on your bank
Securing finance is only part of the story. "It is important for businesses to work with a bank that really understands their business and the market in which they operate," states Andy.
"This close relationship and understanding is key to working through a business cycle. Our relationship managers can provide relevant support and guidance to help them find the right products and services - from enhancing day-to-day cashflow to longer-term borrowing requirements or sector specific needs.
For further information on either the Enterprise Finance Guarantee or the Funding for Lending Scheme, or to use our finance selector and loan calculator tools, please visit www.lloydstsbbusiness.com
Any property given as security which may include your home may be repossessed if you do not keep up repayments on your mortgage or other debts secured on it.
Lloyds TSB Commercial is a trading name of Lloyds TSB Bank plc and Lloyds TSB Scotland plc and serves customers with an annual turnover of up to £15m.
This content has been provided by Lloyds TSB, part of the Lloyds Banking Group.
The Lloyds Banking Group includes Bank of Scotland plc and a number of other companies using brands including Lloyds TSB, Halifax and Bank of Scotland, and their associated companies.
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