Businesses are failing to take advantage of cheap loans offered by British banks, according to new research.
The loans, offered by a range of High Street banks, are considerably less expensive than conventional business loans as the money is sourced direct from the European Investment Bank (EIB). This organisation has retained its AAA credit rating - meaning that it is cheap for banks to borrow from it.
Almost £1.4 billion is available under the scheme, which is primarily aimed at small businesses. But just £726 million of loans have been extended so far. Some 2,769 small firms have benefited from the scheme to date.
The EIB scheme is also significantly more attractive than the government's own Enterprise Finance Guarantee. The European money is 4.5 per cent cheaper than this scheme, and there is a sense that a larger number of firms will be eligible.
The average amount lent under the Enterprise Finance Guarantee is considerably lower than that extended under the European scheme. Around 7,500 businesses have taken advantage of £726 million in Enterprise Finance Guarantee loans.
Firms interested in applying for a loan under the EIB scheme should contact their bank.
