Clifton Asset Management

FALL IN AWARENESS OF FLAGSHIP SCHEME TO HELP SME SECTOR THROUGH RECESSION

Vast majority of SME owner-managers shun government scheme, says Clifton Asset Management

The Government‘s flagship initiative to help UK SMEs through the economic downturn and drag the country out of recession is a flop, according to research.

Of more than 1,000 SME owner-managers polled about the Enterprise Finance Guarantee (EFG) more than a third (37 per cent) have not even heard of it, according to the latest quarterly survey carried out by Clifton Asset Management (CAM).

Worse still for the Government, of the 63 per cent who have heard of the EFG, a full 89 per cent said they saw “no benefit” in applying for its help.

The figures were released as the Chancellor, Alistair Darling, announced an extension of the £1.3 billion scheme, which aims to stimulate bank lending by guaranteeing loans of up to £1 million, by at least another six months beyond its current March 2010 cut off date.

According to the Treasury, the scheme has become a valued source of funding in the wake of the banking bailout and their subsequent reluctance to lend to small businesses.

“Our figures tell a different story,” said Anthony Carty, director at CAM, which provides specialist financial and strategic advice to SMEs. “For a start, according to our research the number of SME owner-managers who are even aware of the scheme has dropped by five per cent from the last quarter‘s survey.

“And, of those who do know about the scheme and its aims, a massive 89 per cent have decided that there is no point in applying for it anyway.

“At a time when SMEs are bracing themselves for a double-whammy of tax increases and spending cuts it is a sorry state of affairs when awareness of the EFG appears to have fallen among business owner-managers.”

Speaking to the House of Lords last week, Business Secretary Lord Mandelson said 6,855 businesses had so far been offered loans totalling £692 million through the EFG.

“These figures are extremely encouraging and the recently-announced extension to the scheme is to be welcomed,” said Mr Carty.

“However from the respondents in our independently-conducted survey a paltry 2 per cent reported success in securing much-needed finance via the EFG, which tells me the scheme is not running as smoothly as the Government would like us to believe.”

Ends 10th December 2009

For further information please contact Louie Hadley Sturgess Van Damme, on 01275 349011 or email louie@sturgessvandamme.co.uk

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