Help with Business finances

UK companies are the lifeblood of the economy. In the current economic climate we know that some companies are struggling to secure the finance they need, not because of any failure in their business but due to much tougher credit conditions. The package of support measures outlined here is designed to improve access to credit and provide help with business finances.

Enterprise Finance Guarantee Scheme

If you have a business with an annual turnover of up to £25 million, you could get a loan of up to £1 million for a period of up to 10 years under the Enterprise Finance Guarantee Scheme. You can use the money to convert an existing overdraft into a loan so that you can free up the overdraft facility for other working capital demands.

Following the launch of the scheme, demand and awareness are growing by the day and around £1m of loans a day is being underwritten to companies.

Barclays, Clydesdale/Yorkshire Bank, HSBC, Lloyds TSB, RBS/Natwest and Northern Bank have signed up to this scheme, so if you apply for a loan from one of these banks you may be able to benefit from the Government's guarantee. As with any other loan, your bank will decide whether to lend to your business, but the Government's guarantee will mean that some businesses that might otherwise not have been able to borrow will be able to obtain a loan. The Government will be monitoring the implementation of this scheme.

North West Regional Finance Schemes

If your business hasn't been able to secure funding from the bank under the Enterprise Finance Guarantee Scheme, you may be eligible for a loan or other support from the Northwest Regional Development Agency. These include:

  • Small Loans for Business. Help for individuals and small business owners and social enterprises to start-up and expand. You must have been unable to secure commercial finance and have a viable business plan. Loans range between £3,000 and £50,000.

  • Venture Capital and Loan Funding. A combination of loan, equity and mezzanine funding to support business growth for companies unable to secure commercial finance with a viable business plan. Loans range from £50,000 to £250,000. Equity and Mezzanine finance is up to £2 million.

  • Northwest Business Angels. A network of private equity investors who invest in new or expanding businesses. Investment levels can range between £10,000 and £500,000.

  • Export Credit Insurance. Policies for contracts involving the export of capital equipment and project related goods and services are provided to UK exporters against risks such as non-payment by overseas buyers.

  • Grant for Business Investment. To support the acquisition of key assets such as buildings, plant and machinery, supporting the creation of new jobs or safeguarding existing ones. Grants range from 10-35% of project costs depending on the location and size of the business, with a maximum project size of £100,000. These grants may also be available to large businesses in some designated areas of Merseyside, North Manchester, Lancashire and West Cumbria.

  • Grant for Research and Development. To assist businesses to introduce innovative products and processes including research trials, product testing, and demonstration of low carbon technologies.

Business Link Northwest can advise on what additional help is available.

Freeing up bank lending: action behind the scenes

The Government is working with UK banks and the European Investment Bank to maintain existing lending and make more available to small and medium-sized firms.

The Working Capital Scheme will secure up to £20 billion of working capital credit lines for ordinary risk companies with a turnover of up to £500 million a year, so ensuring that they are safe from reduction or withdrawal. It will also free up capital which the banks must use for new business lending that would otherwise not be available.

With the European Investment Bank, the Government has helped UK banks to negotiate credit lines of more than £4 billion in order to provide loans to small and medium-sized businesses - £1 billion of which have already been made available.

Capital for Enterprise Fund

Through this fund, viable small businesses with high levels of existing debt can get real help to raise long-term finance. Professional fund managers will provide equity investment which you can use to pay off existing debt, so as to free up capital for day-to-day cash flow and for investment for the future. The Government is providing £50 million of this £75 million fund, with the remaining £25 million coming from RBS, HSBC, Lloyds TSB and Barclays. Several hundred enquiries have been received since the fund was announced and business plans are now being assessed.

For more information call the Capital for Enterprise Fund Registration Helpline on 0845 459 9780.

Need more time to pay your tax bill?

If you are worried about paying your tax, National Insurance, VAT, PAYE or other payments to HM Revenue & Customs (HMRC) then you can contact the Business Payment Support Service. HMRC staff will review payment of your tax liabilities with you and try to come to an arrangement which allows you to spread payment over a period which meets the needs of your business and helps you over temporary difficulties.

You won't be charged additional late payment surcharges or penalties on payments included in the arrangement. But interest will still be payable on those taxes where it applies. Over 30,000 businesses have been helped to spread payments in this way, amounting to more than £500 million of tax.

Contact Business Link or call the Business Payment Support Service, 0845 302 1435.

Managing cash flow

You can find short guides on managing cash flow, developed by the Institute of Credit Management and funded by the Government, through Business Link.

The Government is encouraging all businesses to agree to pay suppliers on time. You can see which businesses have signed up to this at Prompt Payment Code.

Central Government is also helping by committing to pay its own bills within 10 days

Debt problems

To get free, confidential and independent help to deal with business debt problems so you can successfully manage your way through financial difficulties, call Business Debtline on 0800 197 6026.