The EFG scheme offers loans of between £1,000 and £1 million for qualifying companies, and is available until next April. The government provides a guarantee to banks for up to 75 per cent of a company’s debt.
But Philip Munk says the banks are still not allowing loans for companies that want to use the scheme.
“There is anecdotal evidence that these transactions are not going through, and the scheme as a whole is difficult to access, so it’s not been very effective.
“There was a hope that this week’s budget would push the banks to use the EFG scheme more, but there was nothing mentioned.
“The second problem is that it was bought in to replace Small Firms Loan Guarantee scheme, but with the old system the banks didn’t take any security from the company.
“With the EFG they have to take all the security they can to be eligible, so it’s actually working against businesses.
“The government is not being as helpful as it would like us to believe, and the scheme is not working effectively at all.”