FINANCE OPTIONS

Understanding Government Backed Loans: A Complete Guide

Government backed loans are financial products supported by the UK government designed to encourage economic growth. These loans provide SMEs with more favourable terms or reduce risks compared to traditional loans. For instance, the Business Loans page showcases various loan options for businesses.

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What are the benefits of Government Backed Loans?

With government-backed loans, businesses gain easier access to finance, often with lower interest rates and additional support in business planning. These loans cater to those with limited credit histories, providing funding up to £5 million. The application process is expedient, ensuring quick access to essential funds. Our comprehensive Startup Loans guide details the processes and supports available.

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Lower interest rates
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Accessible to more borrowers
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Encourages homeownership

What are the different types of Government Backed Loans?

Startup Loans

Startup Loans are available to individuals over 18, providing amounts from £500 to £25,000 with fixed interest rates of 6% per annum. Typical sectors include retail and hospitality, as noted in our startup loan options.

Startup Loans

The Startup Loans programme requires applicants to be UK-based and in early stages of business. Ideal for launching new products or marketing, decisions are typically made within 2 to 4 weeks. Detailed sector examples are explored in our startup loan review.

Enterprise Finance Guarantee (EFG)

The EFG supports UK SMEs lacking security for traditional loans, with funding options from £1,000 to £1.2m. Learn more about this essential service on our EFG page.

Enterprise Finance Guarantee (EFG)

The EFG offers a government guarantee covering up to 75% of loan values. It is perfect for working capital needs and investments in growth, with lender decisions in 2 to 8 weeks. Our detailed EFG guide provides in-depth understanding.

Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS was designed for pandemic-affected businesses, offering loans up to £5 million. This scheme supports SMEs with viable pre-COVID proposals, as discussed in our Iwoca's loan section.

Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS loans are ideal for addressing cash flow disruptions during crises, offering terms of 3 months to 6 years with swift lender processes. For more details on how CBILS can support businesses, visit our loan review section.

What are Government Backed Loans?

Application Processes

Applying for government-backed loans usually entails detailed business plans and financial forecasts. Once submitted online, decisions can be reached within 2 to 4 weeks, as highlighted in our FlexiBusiness Loans reviews.

Regulatory and Compliance Requirements

Lending practices are regulated by the FCA, ensuring fairness and transparency. The British Business Bank administers loan schemes. Discover more insights on our Quick Business Finance page.

Borrowing Capacity and Rates

Loan amounts vary by scheme, with minimums of £500 up to £5m, generally influenced by business size and creditworthiness. Rates average 6% fixed for startups and are variable for others. We discuss these factors further on our loan calculator page.

FAQ’S

How much can I borrow with a government-backed loan?
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