Official stats reveal Enterprise Finance Guarantee scheme lending in free-fall

According to the statistics, just 919 loans were offered through the scheme between April and June 2011, down from 1,530 loans offered during the same quarter 12 months ago – a reduction of 40%. 

 

Of the 919 loans, 814 were taken up by applying small businesses against 1,450 drawn in 2010/11 – a 45% drop.

 

While double digit drops make for unnerving reading, it’s the stark and near-vertical drop in the average size of loans drawn that really shows the initiative’s reduction in effectiveness: In April to June 2010, the average size of loan offered was around £99,700 – in the same period this year, that figure was just £3,200, which represents a 97% drop.

 

The quarter saw £75.8m in loans drawn, just 12.6% of total amount allocated for the current financial year.

 

Up to £600m of lending was guaranteed by the government for the 2011/12 financial year, a reduction of £100m on the previous year’s funding and less than half the amount made available during the initiative’s first year of running.

 

Since the Enterprise Finance Guarantee first launched in January 2009, over £1.5bn of loans have been offered to small businesses, with over £1.3bn worth taken up by applicants.