Government Business LoansGovernment Business Loans are the way in which governments can ensure companies struggling to obtain financing through traditional means can secure funding Governments worldwide have an interest in the success of businesses as this builds economies, and as a result raises taxes. A government small business loan can also be used in a targeted manner to ensure businesses adopt behaviours that governments want. One such example is the UK government, currently lending at 0% APR to companies who invest in equipment that saves energy in order that the country can reduce carbon emissions in accordance with international agreements.
Planned correctly, this could mean that a company could more than pay for any loan with energy cost savings, and give an infinite return on its investment.
The Small Firms Loan GuaranteeThe Small Firms loan guarantee (SFLG) is not really a government small business loan, but a scheme run by the UK government and aims to assist UK businesses who have been unable to secure finance by traditional methods because of lack of security. In these cases, the government acts as guarantor to the lender, and therefore makes the loans possible. Current participating lenders (in alphabetical order) in the UK are:
Bank of Ireland (NI only) It is possible to borrow between £5,000 and £100,000. There is no such thing as a free lunch, so the borrower has to pay the Department of Trade and Industry a 2% premium per year on any outstanding amount, but any other commercial arrangements are between the lender and you the borrower. To meet the qualifying criteria, your business turnover must be less than £3m.
If you want to find out more about this, don't contact the government, contact the lenders directly.
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