Business Bolton

Economic downturn - latest help announced

Keep up to speed with the latest support packages for local businesses announced nationally in response to the economic downturn.

Clearly provision is changing day by day and this page will be update on a regular basis to reflect the latest news.

While the provision in itself is clearly welcome, it would be enormously helpful for other businesses, and in terms of lobbying; if people were prepared to feedback on their experiences on how readily avaialble and accessible these products actually are. This feedback could then be shared with others.

1.  Adressing financial issues

1.1 The Enterprise Finance Guarantee (EFG)
Announced January 2009, the EFG should support up to £1.3bn of new lending by banks to viable small and medium-sized enterprises. 

Purpose: To provide new working capital and business growth funding through new term loans, existing loans (where refinancing is problematic) and consolidation of overdrafts.

Cost: The cost of the loan will include capital and interest repayments to the bank, any arrangement fee determined by the bank and 2% premium payable to BERR.

Participating Banks: HSBC, Barclays, Clydesdale/Yorkshire Bank, HBOS, Lloyds TSB, RBS/Natwest.

Eligibility: Annual turnover of up to £25m for borrowing between £1,000 and £1,000,000.

N.B. Delivery of the Enterprise Finance Guarantee, including the decision on whether or not it is appropriate to use in connection with any specific lending transaction, is fully delegated to the participating lenders.  There is no automatic entitlement to receive a guaranteed loan and nor is there any pre-qualification process for it.

As with any commercial loans, the bank will base its lending decisons on evidence such as business plans, financial projections, histroric trading figures, statutory and managment accounts and information on any other publicly funded support received in the last three years.

If this is problematic, Business Bolton may be able to provide support to compile this information.

1.2 The Working Capital Scheme (WCS) - Government is also making available to banks guarantees of up to £10 billion, which will support bank lending of up to £20 billion.

The purpose of this facility is to release capital which banks can redeploy in order to increase all types of lending above their current plans to businesses with a turnover of less than £500m. 

 1.3  Equity finance
The Government has launched a £75 million Capital For Enterprise fund (CFE) with £50 million of Government funding which will allow companies to fund business development by selling debt in exchange for an equity stake in their business. The fund will provide equity and quasi-equity of between £250,000 and £2million for companies of up to £50m turnover who have viable business models and growth potential in need of long term capital.

Find more information on the Capital For Enterprise Fund on the Capital for Enterprise Ltd website - opens in a new window.

Since 2006, the Government has established a multi-million pound equity finance scheme, Enterprise Capital Funds (ECFS), to enable funding, of up to £2 million, for businesses that require investment that falls within the 'equity gap' - more than business angels can supply and less than venture capitalists would consider.

Find out more information about ECFS on the Department for Business Enterprise and Regulatory Reform (BERR) website - opens in a new window.

2. Moving to short time working or making redundancies
Should your businesses trading position necessitate a move to short term working, or even the need to make redundancies, there is a range of support available to both the business and the individuals effected via Business Bolton's local partners.

2.1  Lay-offs and short time working
In the event of the business needing to move to short time working, it may be approriate to offer staff the opportunity to consult with the Council's Revenues and Benefits Section who can advise if reduced income thresholds may change their entitlement to Housing Benefit and Council Tax benefit.  The service can be contacted via the Access Bolton One Stop Shop. 

Short time working may also present an opportunity to re-skill staff and there is now greater flexibility around how Train to Gain funding can be used to develop staff.

3. Redundancies

Should the company be forced to make redundancies, local partners lead by Job Centre Plus can mobilise teams to give information on how to sign on and on what support is available in terms of searching for new jobs, getting an up to date CV or re-assessing skills.

Ways to get in touch

For further local support in accessing EFG, contact James Wild on 01204 336165 or email james.wild@bolton.gov.uk