The government this week extended its flagship lending support scheme, the Enterprise Finance Guarantee (EFG), to include top-up invoice finance facilities and new or increased overdraft borrowing up to £1m.

The changes will enable invoice financiers to provide additional working capital against a company’s debtor book up to £1m over a term of between three months and three years.

The overdraft borrowing guarantee facility requires payment of the EFG premium quarterly in advance on the full
facility agreed, irrespective of utilisation.

However, it may be used where an existing overdraft has been reduced or cancelled in the previous three months or where a new or increased overdraft has been refused in the previous three months.

The move was welcomed by business groups. Phil Orford, chief executive of the Forum of Private Business, noted that lending under EFG has not reached the level predicted. “Now the banks must play their part in promoting the extended EFG scheme to their customers,” he said.

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