As a small to medium-sized enterprise, you may have viable business plans that need funding, and for which a loan would be appropriate. However, you may be unable to obtain a conventional loan because you do not have assets to offer as security. The Small Firms Loan Guarantee (SFLG) helps to overcome this by providing lenders with a government guarantee against default in certain circumstances.

The SFLG is a joint venture between the Department for Business, Enterprise and Regulatory Reform and a number of participating lenders.

The main features and criteria of the scheme are:

• A guarantee to the lender covering 75 per cent of the loan amount, for which the borrower pays a 2 per cent premium on the outstanding balance of the loan, payable to the DTI.

• The ability to guarantee loans of up to £250,000 and with terms of up to ten years.

• Availability to qualifying UK businesses with an annual turnover of up to £5.6million and which are up to five years old. This is generally determined by the date the business came within the charge of corporation tax (for a company) or became liable to pay class 2 National Insurance contributions (for a self-employed individual). In the case of a business transfer the five-year age limit applies to both the business making the acquisition and the business being acquired. Read about the five-year rule on the SBS website.

• Availability to businesses in most sectors and for most business purposes, although there are some restrictions.

For further details visit the Business Link website.