Committee calls for evidence from small business on government’s credit scheme

July 27, 2009 at 2:57 pm Leave a comment

portcullis
A committee of MPs has asked small and medium size enterprises to provide evidence on the way in which banks have made use of the Enterprise Finance Guarantee (EFG) scheme.

Announced by Business Secretary Lord Mandelson in January, it was designed to increase the availability of credit at the time when the banks had tightened lending conditions and became more risk averse.

According to figures from his department: “The £1.3bn scheme will support bank lending, of three months to 10 year maturity, to UK businesses with a turnover of up to £25 million who are currently not easily able to access the finance they need.

“It will enable them to secure loans of between £1,000 and £1 million through the Government guarantee and is available up to 31 March 2010.”

The Business and Enterprise Committee has published a report on the Enterprise Finance Guarantee Scheme and called on small and medium-sized businesses to submit their experiences.

The committee said Business Minister Baroness Vadera’s description of the scheme as “to help those at the margins” caused problems because expectations were raised too high, in part because of inaccurate reporting.

The Committee concluded:

“It is important we recognise when the Government does get it right.

“Although it is limited in scope and cannot help all struggling businesses, the Enterprise Finance Guarantee scheme now appears to be working well, after a relatively slow start.

“However, the Committee expresses concern about the potential behaviour of some of the banks involved in the scheme and invites evidence from businesses to monitor this.

“The Government left the decision as to which companies should benefit from its financial guarantees to the banks.

“In the Committee’s view this places a great responsibility on the banks to ensure that those eligible for the scheme benefit from it.

“While it is understandable that, in some cases, banks have had to refuse companies access to the scheme because they have doubts about the long-term viability of the business, Committee members have also been made aware of cases where banks are not offering companies a choice, instead offering single measures, such as factoring, to businesses which would be eligible to benefit from this scheme.”

To coincide with the publication of the report, the Committee is inviting businesses to submit evidence if they feel they have had experience of this happening.

Peter Luff, Committee Chairman, said:

“While we are largely impressed by the way the EFG scheme has been handled, it depends on banks offering appropriate help to their customers.

“We will be monitoring whether the scheme is being offered appropriately, and will return to this issue in the autumn if necessary, after having heard directly from businesses.

“We encourage as many businesses to submit evidence to us as possible.”

NOTE: While the Committee is interested in hearing companies’ experiences, it will not be able to intervene in individual cases, or make judgments as to whether companies are financially viable.

These should be sent, as an MS Word document, of no more than eight pages, by e-mail to efg@parliament.uk with a single hard copy sent to the Clerk of the Committee.

Once submitted evidence is the property of the Committee and should not be published without the Committee’s consent.

The Committee will usually publish evidence it receives, both in printed form and on the Internet.

If you wish your evidence to remain confidential, please contact the Committee staff.

Before submitting evidence, please read the guide to submission of written evidence at: http://www.parliament.uk/parliamentary_committees/witness.cfm

Advertisements

Entry filed under: Committees, Commons. Tags: , , , , , , , , , , .

Fuel poverty scheme “failing poorest and most vulnerable” MPs slam Israel over Gaza bombardment but welcome endorsement of two-state solution

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Follow us on Twitter!

July 2009
M T W T F S S
« Jun   Aug »
 12345
6789101112
13141516171819
20212223242526
2728293031  

%d bloggers like this: