Home > Uncategorized > EFG Loans. A failure?

EFG Loans. A failure?

Quite often I am asked by my clients for details of the availability of EFG loans, which are “enterprise loans” backed by the government.

Lenders do make this product available but you would have to search high and low to find the detail. The fact is that they may have signed up to the offering but are distinctly unenthusiastic.

Why is this?

This strongly opinionated article
gives a few clues

Here are reasons why from both sides of the fence

One of the most controversial elements of the scheme has been the security demanded of borrowers, with reports of directors being asked to provide personal guarantees of up to 100 per cent of the loan amount. The (state-owned) Royal Bank of Scotland has admitted that it requests 100 per cent personal guarantees under the scheme as a matter of course

and

Anecdotally, even those lenders that do subscribe to the scheme aren’t always keen to follow through. McCabe says, “We’ve found that the details of the scheme haven’t been properly promoted within the banks, from their central offices to the regions, and that there is a lack of promotion of the scheme to business customers as well.”

As is so often the case a government scheme is weighed down with bureaucracy and little understanding for the needs and aspirations of the those it is intended to benefit. It is telling that throughout the piece reference is continuously made to the amount of paperwork.

It may be a harsh assessment on my part but Public bodies never seem to understand that the average business owner doesn’t have to find tasks to fill the day but needs to keep unnecessary tasks to the minimum.

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