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EFG Backed Loan Application Process

EFG Backed Loan Application Process: 1 Borrower wishes to borrow money from a Lender. 2 Borrower seeks advice from Business Advisor. 3 Borrower approaches Lender with borrowing proposal (usually with a business plan plus historic and forecast financial information for the business.) 4 Lender assesses viability of business and ability of business to service proposed borrowing requirement, according to normal lending criteria. Potential requirement for security is also assessed. 5 Where Lender deems borrowing proposal is viable but no or insufficient security is available from the Borrower, then proposal may be eligible for EFG. Lender will then assess whether proposal satisfies EFG eligibility criteria as set by BIS. 6 Loan application goes through Lender’s credit sanctioning process. Eligibility for EFG is confirmed only once proposal has been credit sanctioned and Lender’s central EFG team have confirmed full eligibility. 7 Facility documentation, including EFG specific documentation, is forwarded to Borrower by Lender. 8 Loan can be drawn down once all “conditions precedent” within the loan documentation have been satisfied.

How does a business apply for an EFG backed loan?

Step One – Evaluation of Borrowing Proposal (Assessed by Participating Lender)

  • EFG Applicants will potentially need to provide all the information normally required by a lender in connection with a loan application, typically including:
  • business plan, including details of the purpose of the loan and details of other borrowings of the business
  •  Suite of financial information – to include historic trading figures, management accounts and financial projections 
  •  details on any other publicly funded support received by your business within the past three years

 

Step Two – EFG Eligibility Criteria Check (Assessed by Participating Lender)

  • Small businesses in the UK with an annual turnover of up to £25 million
  • Borrowing requirement of £1,000 - £1million
  • Term of loan is minimum 3 months, maximum 10 years
  • Unable to provide any or sufficient additional security to the Lender
  • Most sectors are eligible. The principal exclusions relate to businesses in the coal industry, and certain aspects of agriculture and financial services.  Your lender will advise if any of these restrictions affect your business when they consider your loan application.
  • Is the borrowing for one of the EFG eligible purposes (as detailed in the EFG Questions & Answers)

After assessing the above two areas, the Lender will then advise you on whether your business is eligible for an EFG backed Loan.  Please note that Lenders may ask for additional security in conjunction with the granting of an EFG backed Loan.

 

Cost to Your Business:

  • In addition to regular capital and interest payments to your lender, plus any arrangement fee which they may charge, a premium is also payable to BIS.
  • The premium is equivalent to two per cent per annum on the outstanding balance of the loan, assessed and collected quarterly in advance throughout the life of the loan.