Business Access to Finance: A Case Study of the UK Enterprise Finance Guarantee Scheme

This paper evaluates the UK Enterprise Finance Guarantee (EFG) scheme. It aims to inform businesses about access to finance through the EFG scheme and disseminate information for general use. The methodology adopts case study approach with narrative analysis of EFG user stories. This research use a dataset of the EFG scheme acquired from the UK Department for Business Innovation & Skills. The EFG scheme replaced the Small Firms Loan Guarantee scheme (SFLGS) in the UK. The EFG and SFLGS exhibit different criteria and operational characteristics but they have been successful in the funding of businesses since the origin of SFLGS in 1981 and EFG in 2009. However, EFG provisions continue to fall quarterly with funding decline. There is a commendable ease of EFG funding through banks or non-banking institutions. As well as banks, non-banking institutions can increase their revenue stream and create better competitive interest rate for business borrowers. There is poor awareness of the EFG scheme among potential business users and there is a clear north-south divide in EFG funding.