Bentleys Chartered Accountants is urging small and medium-sized businesses that need financial help to make use of the government’s Enterprise Guarantee Finance Scheme (EFG).

Announced on 14 January by Business Secretary Lord Mandelson, the scheme is providing £1 billion of government guarantees to support up to £1.3 billion of lending to smaller firms seeking finance of between £1,000 and £1 million for up to ten years.

The scheme, which is available up until 31 March 2010, is open to firms with an annual turnover of up to £25m and can be used to support new loans, refinance existing loans or convert part or all of an existing overdraft into a loan to release capacity to meet working capital needs.

Businesses taking out loans under the scheme pay premium equivalent to two per cent (1.5 per cent in the first year) of the outstanding balance of the loan to the Department for Business, Enterprise and Regulatory Reform, in addition to capital and interest payments to their lender.

The majority of businesses in most sectors can seek loans for most purposes. The chief exclusions relate to businesses in the agriculture, coal, and steel sectors and to the financing of individual export orders.

Barclays, Clydesdale/Yorkshire Bank, HBOS, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank are supporting the scheme, which may also become available from other lenders if they wish to become involved.

Mike Turner, partner at Bentleys said: “This scheme provides useful financial support for smaller businesses and is certainly a source of help worth investigating.”

A new web portal has been launched to help businesses check their eligibility for a range of government support at http://www.businesslink.gov.uk/realhelp/finance

Bentleys offers a range of help to businesses seeking support under government schemes, including cash flow forecasting and preparation of documents to support funding applications. For further information, please contact Mike Turner on 01204 388675.