Small and medium-sized businesses are getting a dwindling level of support from the Enterprise Finance Guarantee (EFG) scheme.
The initiative enables the Government to act as a partial guarantor to loans made to smaller companies and it was confirmed in this month’s Budget that the programme is set to continue for at least another two years.
However, figures collated by the British Business Bank and made public this week show that the number of companies actually receiving support has been falling year-on-year since 2009.
In the final three months of last year, just 446 ventures were granted a loan under the EFG scheme.
This is less than a quarter of the 2,030 loans approved seven years ago.
Alex Littner, the managing director of online finance provider Boost Capital, said that the drop in support undermined efforts to provide SMEs with the finance that so many sorely need.
“A mere 1,835 enterprises received EFG-backed loans during the whole of last year; when we consider that 99 per cent of Britain’s 5.4 million business are SMEs, the figures continue to prove that the liquidity lost during the 2008 economic downturn is not back to where it was,” he said.
The Government is now being urged to do more to push EFG and make a concerted effort to ensure that the number of businesses being granted a loan starts to rise again.