In the UK, government loans are offered by over 100 lenders. The money is available to those who are self-employed, in the forces, in a housing association, or for semi-commercial purposes. Whether an individual has excellent or poor credit, a personal, secured, remortgage, or debt consolidation loan can be found.
One of the most popular government loan schemes is designed for small businesses. The SFLG scheme is a joint venture between approved lenders including financial institutions and the Department of Trade and Industry. The government acts as guarantor for up to 75 percent of the loan amount, making it feasible for many small business owners to get funding.
The loans are issued and administered by the approved lending institutions, which also make the commercial lending decisions. Under the scheme, 75 percent the loan amount, which ranges from £5,000 to £250,000, is guaranteed for two to ten years. Features like repayment holidays and staged repayments are included. The guarantee cost is two percent annually for the outstanding loan amount.
There is no official word that the SFLG scheme or any other government loans are being canceled. In fact, the government is attempting to get banks to provide an additional £200 billion in small business loans during 2011. The government has also established the Independent Commission on Banking to consider UK banking reforms designed to promote competition and financial stability.
The UK government provided tens of billions of pounds worth of loans to banks. It has also provided financial assistance to small businesses and others who were most negatively affected by the financial crisis. It continues to offer funding to those who most need it, rather than establishing a scheme of universal aid. Though the credit crunch caused lending institutions to cancel loans for many small businesses, the government continues to provide help.