Enterprise Finance Guarantee scheme – eligibility restrictions for small businesses

The Enterprise Finance Guarantee (EFG) supports small businesses by providing finance to smaller businesses that cannot obtain finance from their lender because of insufficient security. The British Business Bank has now announced that a number of eligibility restrictions are in place because of the European Union’s (EU) state aid rules.

Businesses can apply for the EFG through approaching an EFG accredited lender, and to be eligible, businesses must:

  • Be UK based, with a turnover of no more than £41 million per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
  • Have a sound borrowing proposal and robust business plan, but inadequate security to meet a lender’s normal requirements
  • Be able to confirm that they have not received de minimis-State Aid beyond  £185,000 equivalent over the previous three years

However, further eligibility restrictions now apply, because of the EU’s de minimis-State Aid rules. The main restrictions are as follows:

Not eligible

  • Banks & Building Societies
  • Insurance & Reinsurance
  • Primary education
  • General secondary education
  • Activities of business, employers and membership associations
  • Activities of trade unions
  • Activities of religious organisations
  • Activities of political organisations
  • Activities of households as employers of domestic personnel
  • Undifferentiated goods and services-producing activities of private households for own use

Eligible – provided no ONS public sector classification of borrower or group

  • Combined facilities support activities
  • Public administration and defence, compulsory social security
  • Pre-primary education
  • Tertiary education
  • Hospital activities & other human health activities
  • Residential care activities
  • Social work activities without accommodation for the elderly and disabled
  • Other social work activities without accommodation
  • Library and archive activities
  • Operation of historical sites and buildings, and similar visitor attractions

Eligible – reduced threshold

  • Growing of non-perennial crops – £15,000
  • Growing of perennial crops – £15,000
  • Plant propagation – £15,000
  • Animal production – £15,000
  • Fishing – £30,000
  • Aquaculture – £30,000
  • Processing and preserving of fish, crustaceans and molluscs – £30,000
  • Mixed farming – £15,000
  • Support activities to agriculture and post-harvest crop activities – £15,000
  • Freight transport by road – £100,000

Eligible

  • Activities of financial services holding companies

For more information on the EFG and the eligibility restrictions, go to https://bit.ly/2vNqTRS

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