Panorama - Credit where credit is due.

Alan_M_2

Update on application to Barclays this morning for the EFG scheme.

Barclays interpretation is the scheme is simply a replacement for when Security is not available, each applicant is required to comply with normal lending criteria but not have any assets on which to secure the lending.

However, you are required to match their loan with 50% of your own cash.....

Eh?

We need £200,000, Barclays are only interested if we have put half of it up ourselves, they will then secure 75% of the remaining loan via the EFG scheme and a further 25% on whatever assets you have...except to qualify for the scheme you are obliged not to have any assets....

The scheme as far as Barclays is concerned is not designed to refinance existing lending.

If anyone from Barclays reads this and would care to explain the nonsense I'd be delighted to hear from you.

If I had £100,000 I wouldn't be bothering them. This simply makes no sense.

adr0ck

Alan_M wrote: »

Update on application to Barclays this morning for the EFG scheme.

Barclays interpretation is the scheme is simply a replacement for when Security is not available, each applicant is required to comply with normal lending criteria but not have any assets on which to secure the lending.

However, you are required to match their loan with 50% of your own cash.....

Eh?

We need £200,000, Barclays are only interested if we have put half of it up ourselves, they will then secure 75% of the remaining loan via the EFG scheme and a further 25% on whatever assets you have...except to qualify for the scheme you are obliged not to have any assets....

The scheme as far as Barclays is concerned is not designed to refinance existing lending.

If anyone from Barclays reads this and would care to explain the nonsense I'd be delighted to hear from you.

If I had £100,000 I wouldn't be bothering them. This simply makes no sense.

this is barclays policy now

if they lend you anything they want you to put money in first and then they will lend

don't see how this works really but there you go

Alan_M_2

According to the BERR.gov website the idea of the EFG is as follows:-

Enterprise Finance Guarantee

In the current climate, businesses are finding it increasingly hard to access the finance they need, particularly working capital. This is not because the business has suddenly transformed from a success to a failure; but because the current economic conditions has made a significant impact on the availability of capital as the banks change their approach to risk and tighten lending conditions. Under the Enterprise Finance Guarantee, the Government will guarantee lending to viable businesses to ensure that they can get the working capital and investment that they need.
This £1.3bn scheme will support bank lending, of 3 months to 10 year maturity, to UK businesses with a turnover of up to £25 million who are currently not easily able to access the finance they need. It will enable them to secure loans of between £1,000 and £1 million through the Government guarantee and is available up to 31 March 2010.
The guarantee can be used to support new loans, refinance existing loans, or to convert part or all of an existing overdraft into a loan to release capacity to meet working capital requirements.
The Enterprise Finance Guarantee is available now through 23 lenders.

Talking to each of the lenders mentioned will give you a different version of the above each time, in Barclays case it was made very clear it can not be used to refinance existing borrowing......

It's all tosh....

I've reapplied to my own bank LloydsTSB referring to the text on the above mentioned government website, lets see what excuse they come up with this time and how long it takes.

Alan_M_2

Article on FT.com today.....Stating the Scheme is not even in effect yet, yet many banks are claiming to already have provided funds under it?

http://www.ft.com/cms/s/0/348e952e-06ac-11de-ab0f-000077b07658.html

£10bn loan guarantee scheme hit by delays

By Jean Eaglesham, Chief Political Correspondent
Published: March 1 2009 23:32 | Last updated: March 1 2009 23:32

The government’s flagship £10bn business lending guarantee scheme, due to come into force on Monday, is weeks behind schedule.
The delay will fuel business and union concerns about the pace of government measures to combat the recession.

The £10bn scheme was the centrepiece of a package of measures, branded “real help for business”, unveiled by business secretary Lord Mandelson on January 14. The scheme is designed to support up to £20bn of existing short-term bank lending to medium-sized companies, freeing up capital for new corporate loans.
“The first £1bn tranche of the scheme should be operational by 1 March, supporting around £2bn of loans,” the department for business said in January. But the department has now told the FT it is unable to give a date for when this first tranche is likely to come into effect.
Portfolios of corporate loans for inclusion in the scheme have been submitted by more than one bank. The government is only now, however, starting to enter into negotiations with the lenders over the price that will be charged for the guarantees.
Officials said the commitment to the scheme becoming “operational” this month was always intended to refer to the start of negotiations, rather than the guarantees – and associated release of extra money for lending – coming into effect.
“From March we will enter into pricing negotiations with the banks which have submitted portfolios,” the department said. Some banks are reported to have submitted substantial loan portfolios to access the scheme.
The scheme is dependent on state aid clearance from Brussels. The government submitted the request for that clearance only last week.


Copyright The Financial Times Limited 2009

Rochdale_Pioneers

If you listen to some of the frothers, business shouldn't be getting any money from anyone ever in loans. If you can't pay cash you can't afford it.